U.S.-South Korea Relations

. U.S.-South Korea Relations Mark E. Manyin, Coordinator Specialist in Asian Affairs Emma Chanlett-Avery Specialist in Asian Affairs Mary Beth D. Nikitin Specialist in Nonproliferation Emma Chanlett-Avery Specialist in Asian Affairs William H. Cooper Specialist in International Trade and Finance Ian E. Rinehart Analyst in Asian Affairs June 24, 2014Ian E. Rinehart Analyst in Asian Affairs Brock R. Williams Analyst in International Trade and Finance June 11, 2015 Congressional Research Service 7-5700 www.crs.gov R41481 c11173008 U.S.-South Korea Relations . Summary Overview South Korea (known officially as the Republic of Korea, or ROK) is one of the United States’ most important strategic and economic partners in Asia, and for the past five years relations between the two countries (known officially as the Republic of Korea, or ROK) have been arguably at their best and since 2009 relations between the two countries arguably have been at their most robust state in decades. Members of Congress tend to to be interested in South Korea-related issues for a number of reasons. First, the United States and South Korea have been treaty allies since the early 1950s. The United States is committed to helping helping South Korea defend itself, particularly against any aggression from North Korea. Approximately 28,500 U.S. troops are based in the ROK and South Korea is included under the U.S. “nuclear umbrella.” Second, Washington and Seoul cooperate over how to deal within addressing the challenges posed by North Korea. Third, the two countries’ economies are closely entwined and are joined by the Korea-U.S. Free Trade Agreement (KORUS FTA). South Korea is the United States’ sixth-largest trading partner. Thesixthlargest trading partner and the United States is South Korea’s second-largest trading partner. In late 2013 and early 2014, South Korea tookhas taken the first steps toward possible entry into the U.S.-led Trans-Pacific Partnership (TPP) free trade agreement negotiations. Strategic Cooperation and the U.S.-ROK Alliance Dealing with North Korea is the dominant strategic elementconcern of the U.S.-South Korean relationship. Under South Korean President Park Geun-hye, Seoul and Washington have maintained tight coordination over North Korea policy, forging in effectfollowing a joint approach that contains elements of pressure and engagement. The Obama Administration has supported Park’s “trustpolitik” approach, under which Seoul has proposed some modest confidence-building measures with and humanitarian assistance to Pyongyang in order to build trust between the two sides. Thus far, Park has linked large-scale aid to progress in the denuclearization of North Korea, the United States’ top priority. An issue for the Obama Administration and Congress is to what extent they will support—or, not oppose—Park’s possible inter-Korean initiatives if they expand further. In early 2014, Park launched a campaign to lay the groundwork for an eventual reunification of the two Koreas, which she has referred to as a “bonanza” that will benefit both Koreas economically contains elements of pressure and engagement. In response to Pyongyang’s perceived intransigence and provocative behavior, Washington and Seoul have placed significant emphasis on the harder elements of their approach. Some critics say that the Obama Administration’s policy applies insufficient pressure on North Korea to change its behavior, while others argue that it provides insufficient incentives. The Obama Administration has supported Park’s proposals for confidencebuilding measures with and humanitarian assistance to Pyongyang. She has linked larger-scale aid to progress in the denuclearization of North Korea, the United States’ top priority. Thus far, North Korea generally has resisted Park’s outreach. Since 2009, the United States and South Korea have accelerated steps to reform the U.S.-ROK alliance. Washington and Seoul have initiated plans to relocate U.S. troops on the Korean Peninsula and boost ROK defense capabilities. Some Members of Congress have criticized the cost of the relocation, and Park and her predecessor have slowed the planned defense budget increases. Provocations from North Korea have propelled more integrated bilateral planning for responding to possible contingencies, for instance by adopting policies to respond more swiftly and forcefully to attacks and by discussing improvements to the two countries’ respective missile defense systems. In January 2014, the United States and South Korea reached a new five-year Special Measures Agreement (SMA), under which Seoul will raise its host nation support payments for U.S. forces in Korea by 6%, to around $870 million per year. During President Obama’s April 2014 visit to Seoul, systems. In a related development, in 2014 the United States and South Korea agreed to delay for the second time a 2007 agreement to transfer wartime operational control (Opcon) from U.S. to ROK forces later this decade. On broad strategic matters in East Asia, while South Korean and U.S. perspectives overlap, there are areas of significant differences. For instance, South Korea often hesitates to take steps that antagonize China and has shown mistrust of Japan’s efforts to expand its military capabilities. c11173008 Congressional Research Service U.S.-South Korea Relations . Nuclear Cooperation Agreement In 2013 the Obama and Park governments agreed to a two-year extension of a bilateral civilian nuclear agreement, which now will expire in March 2016. The House and the Senate unanimously unanimously passed the extension, which is considered a temporary solution to avoid any disruption to nuclear energy trade and provide more time for negotiations to continue. South Korea reportedly has requested that the new agreement include provisions that would allow for future uranium enrichment and reprocessing in South Korea. The Obama Administration has resisted this change, which would pose challenges for U.S. non-proliferation policy. Congressional Research Service U.S.-South Korea Relations Contents Developments in the First Half of 2014 Korea sought expanded permission for fuel cycle activities, but the Obama Administration has resisted this change, which would pose challenges for U.S. non-proliferation policy. Both sides have stressed the importance of continuing the close civilian nuclear energy partnership between the two countries. The two countries have concluded negotiations on the text of a new agreement, which is expected to be signed in June 2015. This would be followed by its transmittal to Congress for a required review period before the current agreement expires. c11173008 Congressional Research Service U.S.-South Korea Relations . Contents Developments in the First Half of 2015........................................................................................... 1 President Obama’s April 2014 Trip to South Korea The Overall State of U.S.-South Korea Relations ..................................................................... 1 Sewol Ferry Sinking ...................MERS Outbreak Leads President Park to Postpone Summit ............................................................................................... 2 Cooperation over North Korea Policy ....................................................................................... 2 Nuclear Energy Cooperation AgreementInter-Korean Relations ................................................................................... 3 South Korea Expresses Interest in TPP ............................ 4 South Korea-Japan Relations Stabilize, but Remain Tense ......................................................... 4 South Korea-Japan Relations ............... Expresses Interest in TPP ..................................................................................... 5 State of the Alliance..............6 Nuclear Energy Cooperation Agreement ..................................................................................................... 7 Background on U.S.-South Korea Relations .. 7 State of the Alliance................................................................................. 7 Overview .................................. 8 Park Geun-hye’s Political Standing ................................................................................................. 7 Historical Background 9 South Korean Attitudes Toward the United States and the March 2015 Attack Against the U.S. Ambassador ............................................................................................................ 8 North Korea in U.S.-ROK relations ......10 Background on U.S.-South Korea Relations .................................................................................... 9 North Korea Policy Coordination 10 Overview ....................................................................................... 9 Inter-Korean Relations and Park Geun-Hye’s “Trustpolitik” ............................................ 10 Deterrence Issues........Historical Background....................................................................................................... 12 Security Relations and the11 North Korea in U.S.-ROK AllianceRelations ....................................................................... 12 Upgrades to the Alliance ................................ 12 North Korea Policy Coordination ................................................................................... 13 U.S. Alliance and ROK Defense Reform Plans.. 12 Inter-Korean Relations and Park Geun-Hye’s “Trustpolitik” ............................................ 13 Deterrence Issues.................... 14 South Korea’s Regional Relations ........................................................................................... 20 South Korea-Japan Relations .....................14 Security Relations and the U.S.-ROK Alliance ....................................................................... 21 South Korea-China Relations15 Upgrades to the Alliance ............................................................................................ 25 South Korea-Iran Relations ................ 15 U.S. Alliance and ROK Defense Reform Plans ................................................................ 17 South Korea’s Regional Relations ............................ 26 Economic Relations ............................................................... 23 South Korea-Japan Relations .................................................. 27 South Korea’s Economic Performance................................................. 23 South Korea-China Relations ............................. 28 Nuclear Energy and Non-Proliferation Cooperation ............................................................... 29 Bilateral Nuclear Energy Cooperation 25 Economic Relations ................................................................................. 29 South Korean Nonproliferation Policy ................................ 27 South Korea’s Economic Performance.............................................. 31 South Korean Politics ................................ 29 Nuclear Energy and Non-Proliferation Cooperation ............................................................... 31 Bilateral Nuclear Energy Cooperation .............................. 33 A Powerful Executive Branch ............................................................... 31 South Korean Nonproliferation Policy ............................ 34 Political Parties.................................................. 33 South Korean Politics ................................................................ 34 Selected CRS Reports on the Koreas .............................................. 35 A Powerful Executive Branch ............................................... 35 South Korea ............................................ 36 Political Parties................................................................................. 35 North Korea .................................. 36 Figures Figure 1. Map of the Korean Peninsula ........................................................................................... 36 Figures3 Figure 12. USFK Bases After Realignment Plan Is Implemented ................................................... 1619 Figure 2. Map of the Korean Peninsula .............3. South Korea’s Real GDP Growth, 2007-2014............................................................................ 23 30 Figure 34. Party Strength in South Korea’s National Assembly ...................................................... 35 c11173008 Congressional Research Service U.S.-South Korea Relations . Tables Table 1. Annual U.S.-South Korea Merchandise Trade, Selected Years........................................ 28 Congressional Research Service U.S.-South Korea Relations Contacts Author Contact Information........................................................................................................... 3637 c11173008 Congressional Research Service U.S.-South Korea Relations . T his report contains two main parts: a section describing recent events and a longer background section on key elements of the U.S.-South Korea relationship. The end of the report provides a list of CRS products on South Korea and North Korea. For a map of the Korean Peninsula, see Figure 2 below. Developments in the First Half of 2014 Since late 2008, relations between the United States and South Korea (known officially as the Republic of Korea, or ROK) arguably have been at their best state since the formation of the U.S.-ROK alliance in 1953. Lee and Park both spoke before joint sessions of Congress, in October 2011 and May 2013, respectively. Although the overall U.S.-South Korean relationship has remained healthy under Park, she has hinted at policy moves that could test bilateral ties, particularly with respect to North Korea and the renewal of a U.S.-ROK civilian nuclear cooperation agreement. 1 below. The report identifies South Korean individuals by using their last name first. Developments in the First Half of 2015 South Korea at a Glance Head of State: President Park Geun-hye (elected December 2012; limited to one five-year term) Ruling Party: Saenuri (New Frontier) Party (NFP) Largest Opposition Party: New Politics Alliance for Democracy (NPAD) Infant Mortality: 4.01 deaths/1,000 live births (U.S. = 6.00) Size: slightly larger than Indiana Arable Land: 15.6% Population: 49 million (North Korea = 24.7 million) Population Growth Rate: 0.16% (U.S. = 0.77%) Fertility Rate: 1.24 children born/woman (U.S. = 2.06) Literacy Rate: 98% Size: slightly larger than Indiana Arable Land: 16.6% Nominal GDP: $1.6 trillion (2012 est.); world’s 13thlargest economy (U.S. = $15.7 trillion; North Korea = Life Expectancy: 79.8 years (U.S. = 79.6 yrs.; North Korea = 69.8 yrs.) Infant Mortality: 3.9 deaths/1,000 live births (U.S. = 6.2) GDP (Purchasing Power Parity1): $1.8 trillion (2014 est.); world’s 14th-largest economy (U.S. = $17.4 trillion; North Korea = $40 billion) GDP Per Capita (Purchasing Power Parity): $3235,400 (20122014 est.) (U.S. = $49,800; North Korea = $1,800) Exports: $548.2 billion (2012 est.) Imports: $520.5 billion (2012 est.) Population: 49 million (July 2013 est.) (North Korea = 24.7 million) Ethnicity: homogenous (except for about 20,000 Chinese) Life Expectancy: 79.6 years (U.S. = 78.49 yrs.; North Korea = 69.2 yrs.) Source: CIA, The World Factbook. President Obama’s April 2014 Trip to South Korea In what analysts generally regarded as a successful visit, President Obama traveled to South Korea for a day in late April as part of a week-long trip to Asia that also included Japan, Malaysia, and the Philippines. During the President’s visit, the United States and South Korea announced an agreement to delay the transfer of wartime operational control (OPCON) from U.S. to South Korean commanders that was slated to take place in 2015, citing the more dangerous North Korean threat and needed improvements to military interoperability. The two countries’ joint statement declared, among other items, a mutual recognition of the need for improved trilateral information sharing among the United States, South Korea, and Japan to cope with the North Korean threat.1 President Obama and President Park also discussed implementation of the 1 “Joint Fact Sheet: The United States-Republic of Korea Alliance: A Global Partnership,” The White House, Office of (continued...) Congressional Research Service 1 U.S.-South Korea Relations South Korea-U.S. Free Trade Agreement (KORUS FTA), Seoul’s interest in joining the TransPacific Partnership (TPP), diplomatic strategy for potential nuclear negotiations with North Korea, and the contentious history issues convulsing Japan-ROK relations. Sewol Ferry Sinking The deaths of nearly 300 passengers—mostly high school students—in an April 16 sinking of the Sewol ferry cast a pall over South Korea during the President’s visit. The accident has become a national trauma. The Park government has been criticized for rescuers’ allegedly slower-thannecessary response to distress calls, and the accident has prompted South Koreans to ask questions about how well government agencies have enforced safety regulations, the relationship between government regulators and the industries they oversee, as well as whether companies have put profits ahead of safety. Government prosecutors have brought criminal charges, including accidental homicide, against the captain and members of the crew. In some polls, President Park’s approval ratings and political standing have fallen by more than 10%, down to the 40%-50% range, since the accident. Cooperation over North Korea Policy2 Dealing with North Korea is the dominant strategic element of the U.S.-South Korean relationship. Park has said that her preferred policy toward North Korea “entail[s] assuming a tough line against North Korea sometimes and a flexible policy open to negotiations other times.” Some of the cooperative elements of Park’s approach toward North Korea could conflict with U.S. policy, due to an inherent tension that exists in the two countries’ views of Pyongyang: the United States’ predominant concern is North Korea’s weapons of mass destruction (WMD) programs, but the nuclear and long-range missile issues often competes with other issues, like promoting unification, for the top slot on South Korea’s list of priorities. Because inter-Korean relations have been so poor since 2008, such potential contradictions between U.S. and South Korean interests have not been exposed. Both Seoul and Washington have emphasized deterrence in the face of a series of hostile actions by North Korea, including Pyongyang’s February 2013 nuclear test (its third since 2006), signs of further progress in North Korea’s missile capabilities, and Pyongyang’s firing of hundreds of short-range rockets in March and April 2014. President Park has pledged to retaliate militarily if North Korea attacks the South, as it did in 2010, and over the past year Seoul and Washington ironed out a new counter-provocation plan. The latter was developed to adapt both to the new threats envisioned from North Korea and to the South Korean government’s new willingness to retaliate. Since she began campaigning for the presidency, Park has called for creating a “new era” on the Korean Peninsula by building trust between North and South Korea. However, she has stated that (...continued) the Press Secretary, April 25, 2014, http://www.whitehouse.gov/the-press-office/2014/04/25/joint-fact-sheet-unitedstates-republic-korea-alliance-global-partnershi. 2 For more on North Korea issues, see CRS Report R41259, North Korea: U.S. Relations, Nuclear Diplomacy, and Internal Situation, by Emma Chanlett-Avery and Ian E. Rinehart; and CRS Report RL34256, North Korea’s Nuclear Weapons: Technical Issues, by Mary Beth D. Nikitin. Congressional Research Service 2 U.S.-South Korea Relations a nuclear North Korea “can never be accepted” and that trust-building with Pyongyang will be impossible if North Korea cannot keep the agreements made with South Korea and the international community. Thus, her “trustpolitik,” which the Obama Administration has supported, has combined a mixture of tactics, employing “a tough line” in response to Pyongyang’s military provocations and “a flexible policy open to negotiations” when North Korea’s behavior is more cooperative. An issue for the Obama Administration and Congress is to what extent they will support—or not oppose—Park’s proposed inter-Korean initiatives. For instance, legislative efforts in Congress to expand U.S. sanctions against North Korea, such as H.R. 1771, the North Korea Sanctions Enforcement Act, could conflict with some of Park’s initiatives. Thus far, the Obama Administration appears comfortable letting Seoul take the lead in trying to encourage more cooperative behavior from Pyongyang. Park has delinked Seoul’s humanitarian assistance to North Korea from other diplomatic developments. Since early 2014, Park has launched a campaign to lay the groundwork for an eventual reunification of the two Koreas, which she has referred to as a “bonanza” that will benefit both Koreas economically. Among other items, she has proposed to Pyongyang that the two Koreas hold regular reunions for families separated since the Korean War ended in 1953 and has held out the prospect of South Korean investments in North Korean infrastructure projects. She appears to have linked large-scale investments to a North Korean decision to “choose the path of denuclearization.”3 North Korea has rejected Park’s offer to take preliminary steps toward reintegrating the two Koreas. (For more on cooperation over North Korea, see the “North Korea in U.S.-ROK relations” section.) Nuclear Energy Cooperation Agreement In April 2013, the United States and South Korea announced that they had agreed to a two-year extension of the existing bilateral civilian nuclear cooperation agreement, also known as a 123 agreement, which was due to expire in March 2014.4 Legislation to authorize the two-year extension was passed unanimously by both the House and Senate and signed into law by President Obama on February 12, 2014 (P.L. 113-81).5 For years, talks between South Korea and the United States were not able to resolve disagreement over how to treat fuel-making technologies in a renewed accord, and therefore the two countries decided to allow for more negotiating time. The two-year extension is considered a temporary solution to avoid any disruption to nuclear trade. A lapse could have affected exports of U.S. nuclear materials and reactor components to Korea, and could potentially affect ongoing construction of South Korean reactors in the United Arab Emirates, for which U.S. companies are providing components and services. 3 Park Geun-hye, “An Initiative for Peaceful Unification on the Korean Peninsula,” March 28, 2014, Speech at the Dresden University of Technology. 4 “123” refers to Section 123 of the Atomic Energy Act (as amended). Full text of the agreement is available at http://nnsa.energy.gov/sites/default/files/nnsa/inlinefiles/Korea_South_123.pdf. 5 Representative Royce introduced H.R. 2449 (H.Rept. 113-209), which was passed by the House unanimously on September 17. Senate Foreign Relations Committee Chairman Menendez and Ranking Member Corker introduced S. 1901, which was passed by the Senate on January 27, 2014. Congressional Research Service 3 U.S.-South Korea Relations One point of disagreement in the renewal process is whether South Korea will press the United States to include a provision that would allow for the reprocessing of its spent fuel. The South Korean government is reportedly also seeking confirmation in the renewal agreement of its right to enrichment technology. The current U.S.-Korea nuclear cooperation agreement, as with other standard agreements,6 requires U.S. permission before South Korea can reprocess U.S.-origin spent fuel, including spent fuel from South Korea’s U.S.-designed reactors.7 The issue has become a sensitive one for many South Korean officials and politicians, who see it as a matter of national sovereignty. The United States has been reluctant to grant such permission due to concerns over the impact on negotiations with North Korea and on the nonproliferation regime overall. Through reprocessing, spent fuel can be used to make reactor fuel or to acquire plutonium for weapons. For many years, the United States and South Korea have worked on joint research and development projects to address spent fuel disposition, including joint research on pyro-processing, a type of spent fuel reprocessing. In October 2010, the two countries began a 10year, three-part joint research project on pyro-processing that includes joint research and development at Idaho National Laboratory, development of international safeguards for this technology, economic viability studies, and other advanced nuclear research including alternatives to pyro-processing for spent fuel disposal.8 (For more on the negotiations and the debate over U.S.-ROK civilian nuclear cooperation, see the “Nuclear Energy and NonProliferation Cooperation” section below.) South Korea Expresses Interest in TPP In the fall of 2013, after months of speculation, the South Korean government signaled its “interest” in joining the twelve-nation Trans-Pacific Partnership (TPP) free trade agreement talks.9 The economic size and strategic importance of TPP would expand significantly if South Korea—East Asia’s third-largest economy—enters the negotiations.10 One of Park’s top policy agendas is reviving the country’s economy. To this end, her government has initiated a trade strategy of entering into more FTAs, thereby making South Korea into a “linchpin” of accelerated economic integration.11 South Korea is negotiating a number of FTAs, including a bilateral agreement with China as well as a trilateral agreement with China and Japan. South Korea also recently concluded bilateral FTA negotiations with Australia and Canada. 6 CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth D. Nikitin. 7 Under the 1978 Nuclear Nonproliferation Act, consent rights apply to material originating in the U.S. or material that has been fabricated into fuel or irradiated in a reactor with U.S. technology. The majority of South Korea’s spent fuel would need U.S. consent before it could be reprocessed. 8 “Discussions on Korea-U.S. Joint Research on Fuel Cycle,” Press Release, Ministry of Education, Science and Technology, Republic of Korea, April 18, 2011; “S. Korea, U.S. Agree to Start Joint Study on Nuclear Fuel Reprocessing,” Yonhap, April 17, 2011. 9 The TPP negotiating parties are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. For more on the TPP, see CRS Report R42694, The Trans-Pacific Partnership (TPP) Negotiations and Issues for Congress, coordinated by Ian F. Fergusson. 10 While expanding the size of the potential agreement, South Korea’s entry into TPP would be expected to have a smaller impact on U.S.-South Korea trade flows, because of the existing bilateral U.S.-South Korea free trade agreement (KORUS). 11 Ministry of Trade, Industry and Energy Press Release 436, “Korea Outlines New Trade Policy Direction,” June 25, 2013. Congressional Research Service 4 U.S.-South Korea Relations The Obama Administration has “welcomed” Korea’s interest in joining the talks, though United States Trade Representative (USTR) officials also have indicated they will place priority on concluding an agreement with the existing members before agreeing to the entry of any new countries. The current TPP countries must reach unanimous agreement on South Korea’s entry before Seoul can join, and in December 2013 Korea began holding preliminary consultations with TPP members. The next formal step for South Korea to enter the TPP would be for the South Korean government to formally announce that it is seeking to participate. The United States may require some preliminary commitments from Seoul before it agrees to South Korea’s participation in the negotiations. South Korea’s willingness and ability to resolve remaining issues with the implementation of the KORUS FTA are among such measures.12 For example, U.S. exporters have claimed the agreement’s effectiveness has been diminished by South Korean customs authorities requiring allegedly excessive documentation to certify rules of origin of imports of U.S. products. U.S. officials have also argued that a South Korean tax credit/tax penalty program for car purchases discriminates against imports of U.S.-made cars. U.S. officials reportedly also have been discussing with South Korea issues that would be included in the TPP but are not part of the KORUS FTA, such as state-owned enterprises and regulatory coherence, to see if South Korea would be prepared to make commitments in these areas. If Seoul officially seeks to participate in the negotiations and reaches agreements with the 12 members over the terms of its entry, they would officially invite South Korea to join and also initiate their domestic notification procedures. In the case of the United States, this latter process would involve notifying Congress of an intention to enter into FTA negotiations with South Korea after a period of 90 days. Ultimately, Congress must approve implementing legislation if a completed TPP agreement— with or without South Korea—is to apply to the United States. Additionally, during the TPP negotiating process, Congress has a formal and informal role in influencing U.S. negotiating positions, which can include the process of granting new trade promotion authority (TPA) to the President. TPA, which expired in 2007, is the authority that Congress gives to the President to negotiate trade agreements that would receive expedited legislative consideration. In January 2014, legislation to renew TPA was introduced in the House (H.R. 3830) and in the Senate (S. 1900).13 (For more on U.S.-South Korean economic relations, see the “Economic Relations” section.) South Korea-Japan Relations South Korea’s relations with Japan continued to worsen in the first half of 2014, a development that drew considerable attention from U.S. policy makers and Members of Congress who met with officials from both countries. A poor relationship between Seoul and Tokyo jeopardizes U.S. interests by complicating more robust trilateral cooperation over North Korea policy and discussions about regional trends such as China’s rise. Tense relations also complicate Japan’s 12 The White House, “Remarks by President Obama at Business Roundtable,” press release, April 26, 2014. In his remarks, President Obama said, “I discussed this [KORUS implementation] with President Park last night. We both agreed that these are issues we can work through together. And given South Korea’s interest in the Trans-Pacific Partnership, fully implementing KORUS also is the single most important step that South Korea can take now to show that it’s prepared to eventually meet the high standards of TPP.” 13 For more on TPA, see CRS Report RL33743, Trade Promotion Authority (TPA) and the Role of Congress in Trade Policy, by William H. Cooper Congressional Research Service 5 U.S.-South Korea Relations desire to expand its military and diplomatic influence, goals the Obama Administration generally supports, as well as the creation of an integrated U.S.-Japan-South Korea missile defense system. South Korea’s relations with Japan were a major topic of President Obama’s April visits to Seoul and Tokyo, and they took center stage in late March, when President Obama orchestrated the first official meeting between Park and her Japanese counterpart, Prime Minister Shinzo Abe, on the sidelines of the Nuclear Security Summit. The three leaders discussed cooperation over North Korea policy. In South Korea leaders have objected to a series of statements and actions by Abe and his Cabinet officials that many have interpreted as denying or even glorifying Imperial Japan’s aggression in the early 20th century. Seoul has maintained that it would have difficulty holding a summit, or improving relations, unless Japan adopts a “correct understanding” of history. These sentiments hardened in December 2013 when Abe visited the Yasukuni Shrine, which houses the spirits of Japanese soldiers who have died during war, including several individuals who were convicted as Class A war criminals after World War II. Another major focus of South Korean grievances is a contention that Japan has inadequately acknowledged and addressed the suffering of the World War II “comfort women,” women who were forced to provide sexual services to Japanese soldiers during Imperial Japan’s conquest and colonization of several Asian countries in the 1930s and 1940s, including Korea. For a brief window in April, it seemed that the two governments were trying to get relations back on track by opening a diplomatic channel to discuss the “comfort women” issue. These efforts faltered, however, when the Abe government released a study in June that examined the “Kono Statement,” a 1993 apology by then-Chief Cabinet Secretary Yohei Kono that acknowledged the Japanese military’s role in coercing women into the brothel system. The panel that conducted the study, carried out in response to a request by a Diet member of a far-right opposition party, concluded that the statement had been crafted in consultation with Seoul, implying that the document was not based solely on historical evidence. The Abe government has pledged that it stands by the Kono Statement, but critics claim that the study discredits the apology and gives further proof of Tokyo’s (and specifically Abe’s) revisionist aims. South Korea’s Foreign Ministry called the study “meaningless and unnecessary.” The U.S. House of Representatives has taken an interest in the comfort women issue and has introduced two resolutions, one in 2006 and one in 2007. In the 109th Congress, H.Res. 759 was passed by the House International Relations Committee on September 13, 2006, but was not voted on by the full House. In the 110th Congress, H.Res. 121, with 167 co-sponsors, was passed in the House on July 30, 2007, by voice vote. This resolution expresses the sense of the House that Japan should “formally acknowledge, apologize, and accept historical responsibility in a clear and unequivocal manner” for its abuses of the comfort women. The text of the resolution calls the system “unprecedented in its cruelty” and “one of the largest cases of human trafficking in the 20th century,” asserts that some Japanese textbooks attempt to downplay this and other war crimes, and states that some Japanese officials have tried to dilute the Kono Statement. In the 113th Congress, the 2014 Consolidated Appropriations Act (P.L. 113-76, H.R. 3547) indirectly referred to this resolution. P.L. 113-76’s conference committee issued a Joint Explanatory Statement that called on Federal Agencies to implement directives contained in the July 2013 H.Rept. 113-185, which in turn “urge[d] the Secretary of State to encourage the Government of Japan to address the issues raised” in H.Res. 121. Congressional Research Service 6 U.S.-South Korea Relations State of the Alliance Since 2009, the United States and South Korea have accelerated steps to transform their alliance, broadening it from its primary purpose of defending against a North Korean attack to a regional and even global partnership. Joint statements issued from a series of high-level meetings emphasized the commitment to modernize and expand the alliance while reaffirming the maintenance of current U.S. troop levels on the peninsula and the U.S. security guarantee to protect South Korea. Spurred by violent attacks from North Korea in 2010, the alliance partners agreed on a “Counter-Provocation Plan” and then sharpened the agreement by developing a “Tailored Deterrence Strategy against North Korean Nuclear and Other WMD Threats.” A highlevel joint statement in October 2013 committed both sides to improving their missile defense systems. Despite these indicators of strength, the alliance faces a host of challenges in the months and years ahead. The political atmospherics of the alliance have been positive, but the conservative Park and Lee governments have slowed the defense budget increases planned under the earlier, progressive Roh Moo-hyun Administration (2003-2008). The two countries also must resolve disputes related to the realignment of U.S. forces within Korea, a process that Congress has followed closely because of concerns about the cost. The 2007 agreement to transfer wartime operational control (Opcon) from U.S. to ROK forces by 2015 has resurfaced as a point of controversy. At the request of South Korea, the United States has agreed to review the timing of the Opcon transfer and will reportedly delay the transfer to the 2020s, after South Korea improves military capabilities in specified domains.14 The planned realignment of all U.S. forces from bases near the de-militarized zone (DMZ) border with North Korea to bases farther south is making progress, but one aspect of the plan is under review. The commander of U.S. Forces Korea (USFK) has indicated that some “residual” staff may continue to fulfill the so-called “tripwire” function of U.S. forces stationed near the DMZ.15 South Korean defense officials denied that any U.S. troops would remain “north of Seoul.”16 (For more on alliance issues, including congressional actions, see the “Security Relations and the U.S.-ROK Alliance” section.) Background on U.S.-South Korea Relations Overview While the U.S.-South Korea relationship is highly complex and multifaceted, five factors arguably drive the scope and state of relations between the two allies: • the challenges posed by North Korea, particularly its weapons of mass destruction programs and perceptions in Washington and Seoul of whether the 14 Song Sang-ho, “Allies Rack Brains over OPCON Transfer,” Korea Herald, May 6, 2014 Ser Myo-ja, “USFK May Keep Tripwire Function,” Korea JoongAng Daily, November 26, 2013. 16 Lee Chi-Dong, “USFK Base Relocation Project on Track, but Some Details Still Being Discussed: Commander,” Yonhap News Agency, May 23, 2014. 15 Congressional Research Service 7 U.S.-South Korea Relations Kim Jong-un regime poses a threat, through its belligerence and/or the risk of its collapse; • the growing desire of South Korean leaders to use the country’s middle power status to play a larger regional and, more recently, global role; • China’s rising influence in Northeast Asia, which has become an increasingly integral consideration in many aspects of U.S.-South Korea strategic and economic policymaking; • South Korea’s transformation into one of the world’s leading economies—with a strong export-oriented industrial base—which has led to an expansion of trade disputes and helped drive the two countries’ decision to sign a free trade agreement; and • South Korea’s continued democratization, which has raised the importance of public opinion in Seoul’s foreign policy. Additionally, while people-to-people ties generally do not directly affect matters of “high” politics in bilateral relations, the presence of over 1.2 million Korean Americans and the hundreds of thousands of trips taken annually between the two countries has helped cement the two countries together. Members of Congress tend be interested in South Korea-related issues because of bilateral cooperation over North Korea, a desire to oversee the management of the U.S.-South Korea alliance, South Korea’s growing importance on various global issues, deep bilateral economic ties, and the interests of many Korean Americans. The 112th Congress held over 15 hearings directly related to South and North Korea. Large majorities of South Koreans say they value the U.S.-ROK alliance and have positive opinions of the United States. However, many South Koreans are resentful of U.S. influence and chafe when they feel their leaders offer too many concessions to the United States. South Koreans also tend to be wary of being drawn into U.S. policies that antagonize China. Although many of these concerns are widely held in South Korea, they are particularly articulated by Korea’s progressive groups, who have opposed much of Park and Lee’s policy agenda and their governing styles. Historical Background The United States and South Korea have been allies since the United States intervened on the Korean Peninsula in 1950 and fought to repel a North Korean takeover of South Korea. Over 33,000 U.S. troops were killed and over 100,000 were wounded during the three-year conflict. On October 1, 1953, a little more than two months after the parties to the conflict signed an armistice agreement, the United States and South Korea signed a Mutual Defense Treaty, which provides that if either party is attacked by a third country, the other party will act to meet the common danger. The United States maintains about 28,500 troops in the ROK to supplement the 650,000strong South Korean armed forces. South Korea deployed troops to support the U.S.-led military campaign in Vietnam. South Korea subsequently has assisted U.S. deployments in other conflicts, most recently by deploying over 3,000 troops to play a non-combat role in Iraq and over 300 noncombat troops to Afghanistan. Congressional Research Service 8 U.S.-South Korea Relations Beginning in the 1960s, rapid economic growth propelled South Korea into the ranks of the world’s largest industrialized countries. For nearly two decades, South Korea has been one of the United States’ largest trading partners. Economic growth, coupled with South Korea’s transformation in the late 1980s from a dictatorship to a democracy, also has helped transform the ROK into a mid-level regional power that can influence U.S. policy in Northeast Asia, particularly the United States’ approach toward North Korea. North Korea in U.S.-ROK relations North Korea Policy Coordination Dealing with North Korea is the dominant strategic element of the U.S.-South Korean relationship. South Korea’s growing economic, diplomatic, and military power has given Seoul a much more direct and prominent role in Washington’s planning and thinking about how to deal with Pyongyang. One indicator of South Korea’s centrality to diplomacy over North Korea is that no successful round of the Six-Party nuclear talks has taken place when inter-Korean relations have been poor. The Joint “Strategic Patience” Approach Since 2009, U.S.-South Korean collaboration over North Korea has been extremely close, after several years in which the two countries frequently had competing visions of how to handle North Korea. In effect, Washington and Seoul have adopted a joint approach toward North Korea, one that largely has continued during Park’s tenure. In essence, the approach—which is often called “strategic patience”—has four main components: • keeping the door open to Six-Party Talks over North Korea’s nuclear program but refusing to re-start them without a North Korean assurance that it would take “irreversible steps” to denuclearize;17 • insisting that Six-Party Talks and/or U.S.-North Korean talks must be preceded by North-South Korean talks on denuclearization and improvements in NorthSouth Korean relations; • gradually attempting to alter China’s strategic assessment of North Korea; and • responding to Pyongyang’s provocations by tightening sanctions against North Korean entities and conducting a series of military exercises. Strategic patience could be described as a passive-aggressive approach that effectively is a policy of containing North Korea’s proliferation activities, rather than rolling back its nuclear program. One drawback is that it has allowed Pyongyang to control the day-to-day situation. While Washington and Seoul wait to react to Pyongyang’s moves, the criticism runs, North Korea has continued to develop its uranium enrichment program, has often appeared to solidify support from China, and has embarked on a propaganda offensive designed to shape the eventual negotiating agenda to its benefit. Many of Park’s proposed initiatives with North Korea appear 17 The Six-Party talks were held among China, Japan, North Korea, Russia, South Korea, and the United States between 2003 and 2008. Congressional Research Service 9 U.S.-South Korea Relations designed to rectify these perceived shortcomings. To date, however, North Korea’s actions since her inauguration have not provided her government with an opportunity to apply her policies. The joint U.S.-ROK approach has involved elements of both engagement and pressure. Washington and Seoul have tended to reach out to North Korea during relatively quiescent periods. In contrast, they have tended to emphasize pressure tactics during times of increased tension with North Korea. These periods occurred repeatedly after Lee Myung-bak’s inauguration in February 2008. Most notably, they included North Korean nuclear tests in May 2009 and February 2013; North Korean long-range rocket launches in April 2009, April 2012, and December 2012; the March 2010 sinking of a South Korean naval vessel, the Cheonan; and the November 2010 North Korean artillery attack on the South Korean island of Yeonpyeong-do.18 The latter incident was North Korea’s first direct artillery attack on ROK territory since the 19501953 Korean War and served to harden South Korean attitudes toward North Korea. President Lee reportedly stated that he wanted to order a retaliatory air strike, but the existing rules of engagement—which he subsequently relaxed—and the existence of the U.S.-ROK military alliance restrained him.19 Park Geun-hye has implied that South Korea’s military response, which primarily consisted of launching about 80 shells at North Korea and holding large-scale exercises with the United States, was insufficient. Inter-Korean Relations and Park Geun-Hye’s “Trustpolitik” Park’s statements on North Korea policy include elements of both conciliation and firmness, and she has written that her approach would “entail assuming a tough line against North Korea sometimes and a flexible policy open to negotiations other times.”20 On the one hand, Park has called for creating a “new era” on the Korean Peninsula by building trust between North and South Korea. To build trust, Park has indicated a desire to eventually: • resume North-South Korean dialogue and give “new momentum” to the SixParty talks over North Korea’s nuclear program;21 • delink humanitarian assistance from overall diplomatic developments and make such assistance more transparent than in the past; • ease or end the restrictions on South Korean commercial ties to North Korea that the South Korean government imposed after the April 2010 sinking of the South Korean naval vessel, the Cheonan; • restore cooperation with North Korea for South Koreans to participate in tours of Mt. Kumgang and Kaesong city inside North Korea; 18 On Yeonpyeong-do, over 150 shells fired by North Korea killed four South Koreans (two Marines and two civilians), wounded dozens, and destroyed or damaged scores of homes and other buildings. All 46 South Korean sailors on the Cheonan died. A multinational team that investigated the sinking, led by South Korea, determined that the ship was sunk by a North Korean submarine. The cause of the Cheonan’s sinking has become highly controversial in South Korea. While most conservatives believe that North Korea was responsible for explosion, many who lean to the left have criticized the investigation team as biased or argue that its methodology was flawed. 19 “Lee Recalls Getting Tough with N.Korea,” Chosun Ilbo, February 5, 2013. 20 Park Geun-hye, “A New Kind of Korea: Building Trust between Seoul and Pyongyang,” Foreign Affairs, September/October 2011. 21 The Six Party Talks, which were last held in late 2008, involved China, Japan, North Korea, Russia, South Korea, and the United States. Congressional Research Service 10 U.S.-South Korea Relations • internationalize and expand the Kaesong Industrial Complex, an industrial park inside North Korea where over 100 South Korean companies employ over 40,000 North Koreans; • uphold the promises former President Roh Moo-hyun made in an October 2007 summit with former North Korean leader Kim Jong-il to provide large-scale economic assistance and fund reconstruction projects; • explore the building of a transportation and energy network running through North Korea to connect South Korea with China, Russia, and the rest of Eurasia; and • meet with North Korean leader Kim Jong-un “if it helps to foster South-North relations.”22 These policies are generally consistent with Park’s actions and words for over a decade; for instance, in 2002 she visited Pyongyang and met with Kim Jong-il. As of early 2014, she has delinked humanitarian assistance from other diplomatic developments, and has offered smallscale bilateral assistance and allowed South Korean non-governmental groups to operate in North Korea. The Obama Administration has indicated its support for Park’s trustpolitik.23 On the other hand, Park also has long stated that a nuclear North Korea “can never be accepted” and that building trust with Pyongyang will be impossible if it cannot keep the agreements made with South Korea and the international community. Park has also said that South Korea will “no longer tolerate” North Korean military attacks, that they will be met with an “immediate” South Korean response, and that the need for South Korea to punish North Korean military aggression “must be enforced more vigorously than in the past.”24 After North Korea’s successful December 2012 launch of a satellite (using long-range missile technology), February 2013 nuclear test, partial closure of the inter-Korean industrial park near the city of Kaesong, and bellicose rhetoric, Park emphasized the strength of the ROK-U.S. deterrence posture. Meanwhile, the United States demonstrated its commitment to defend South Korea with unusually well-publicized practice sorties by B-52 bombers, B-2 bombers, and F-22 fighters, among other measures. It is not clear how the Park government will resolve the seeming contradiction between the impulses of toughness and flexibility. A key question will be the extent to which her government will continue to link progress on denuclearization—the United States’ top concern—to other elements of South Korea’s approach toward North Korea. Likewise, an issue for the Obama Administration and Members of Congress is to what extent they will support—or, not oppose— any initiatives by Park to expand inter-Korean relations. 22 Park Geun-hye, “Trustpolitik and the Making of a New Korea,” November 15, 2012. During February 2013 testimony before the National Assembly, Foreign Minister Yun Byung-se reportedly said that “it’s too early” to send an emissary to North Korea to work on improving bilateral ties. “ROK FM Nominee Says DPRK’s Nuclear Capacity ‘At Top Level,’” Yonhap, February 28, 2013. 23 State Department, “Joint Statement Adopted at the United States-Republic of Korea Foreign Ministers’ Meeting,” April 13, 2013. 24 Park Geun-hye, “A New Kind of Korea,” Foreign Affairs, September/October 2011. Congressional Research Service 11 U.S.-South Korea Relations Deterrence Issues One factor that may influence U.S.-ROK cooperation on North Korea is Pyongyang’s apparent progress in its missile and nuclear programs. North Korea’s February 2013 nuclear test, for instance, triggered calls in South Korea for the United States to redeploy tactical nuclear weapons in the ROK and for South Korea to develop its own nuclear weapons deterrent. To reassure South Korea and Japan after North Korea’s test, President Obama personally reaffirmed the U.S. security guarantee of both countries, including extended deterrence under the United States’ socalled “nuclear umbrella.” In early March 2013, Park stated that “provocations by the North will be met by stronger counter-responses,” and the chief operations officer at South Korea’s Office of the Joint Chiefs of Staff was widely quoted as saying that if South Korea is attacked, it will “forcefully and decisively strike not only the origin of provocation and its supporting forces but also its command leadership.”25 South Korean defense officials later clarified that “command leadership” referred to mid-level military commanders who direct violent attacks and not North Korean political leaders such as Kim Jong-un. Since North Korea’s 2010 shelling of Yeonpyeong Island, South Korean leaders have shown a greater willingness to countenance the use of force against North Korea. The Lee government pushed the alliance to develop a new “proactive deterrence” approach that calls for a more flexible posture to respond to future attacks, as opposed to the “total war” scenario that drove much of USFK defense planning in the past. For instance, Lee pushed the United States to relax restrictions on South Korean ballistic missiles (see the “U.S. Alliance and ROK Defense Reform Plans” section below) and relaxed the rules of engagement to allow frontline commanders greater freedom to respond to a North Korean attack without first asking permission from the military chain of command.26 Such changes have made some analysts and planners more concerned about the possibility that a small-scale North Korean provocation could escalate. U.S. defense officials insist that the exceedingly close day-to-day coordination in the alliance ensures that U.S.-ROK communication would be strong in the event of a new contingency. The 2013 “CounterProvocation Plan” was developed to adapt both to the new threats envisioned from North Korea and to the South Korean government’s new attitudes about retaliation. Security Relations and the U.S.-ROK Alliance The United States and South Korea are allies under the 1953 Mutual Defense Treaty. Under the agreement, U.S. military personnel have maintained a continuous presence on the Korean Peninsula and are committed to help South Korea defend itself, particularly against any aggression from the North. The United States maintains about 28,500 troops in the ROK. South Korea is included under the U.S. “nuclear umbrella,” also known as “extended deterrence,” which applies to other non-nuclear U.S. allies as well. A bilateral understanding between Washington and Seoul gives U.S. forces the “strategic flexibility” to respond to contingencies outside the peninsula, but under the condition that South Korea would have to consent to their deployment in an East Asian conflict. In the past, issues surrounding U.S. troop deployments have been a flashpoint for public disapproval of the military alliance, led by progressive political groups, but 25 Blue House, “Park Geun-hye 2013 March 1st Speech,” March 1, 2013; Choe Sang-Hun, “South Korea Pushes Back on North’s Threats,” NYTimes.com, March 6, 2013. 26 “Lee Recalls Getting Tough with N.Korea,” Chosun Ilbo, February 5, 2013. Congressional Research Service 12 U.S.-South Korea Relations in recent years public support for the alliance has become broader and more resilient to incidents involving U.S. bases and soldiers in South Korea. Despite the strengths of the alliance, tensions periodically arise in the partnership. Some of these involve typical alliance conflicts over burden sharing and cost overruns of ongoing realignment initiatives. Others reflect sensitive sovereignty issues involving Seoul’s control over its own military forces and desire to develop its own defense industry without dependence on American equipment. And although the United States and South Korea share a common interest in repelling any North Korea attack, views on the overall security landscape in Northeast Asia differ. Seoul resists adopting positions that threaten or offend China, and distrusts Japan’s efforts to expand its military capabilities. Upgrades to the Alliance Since 2009, the two sides have accelerated steps to transform the U.S.-ROK alliance, broadening it from its primary purpose of defending against a North Korean attack to a regional and even global partnership. At the same time, deadly provocations from North Korea have propelled more integrated bilateral planning for responding to possible contingencies. In 2011, the allies adopted a “proactive deterrence” policy to respond swiftly and forcefully to further provocations. Increasingly advanced joint military exercises have reinforced the enhanced defense partnership. In March 2013, U.S. officials disclosed that B-52 and B-2 bombers participated in exercises held in South Korea, apparently making this announcement as a demonstration of the U.S. commitment to extended deterrence, following a period of unusually hostile rhetoric from Pyongyang.27 In 2012, the two sides held their second so-called “2+2” meeting between the U.S. Secretaries of State and Defense and their South Korean counterparts. Among other policy areas, the joint statement emphasized new initiatives on cybersecurity and missile defense, and the United States committed to maintaining current troop levels in Korea. In 2013, in addition to developing new counter-provocation and tailored deterrence strategies, the two sides issued a high-level joint statement in October 2013 committing to improving their respective ballistic missile defense (BMD) systems. The United States has urged South Korea to develop advanced BMD capabilities that are more integrated with U.S. and allied BMD systems in the region, as shown in the aforementioned joint statement issued during President Obama’s April 2014 visit to Seoul. The Vice Chairman of the U.S. Joint Chiefs of Staff has explained that a regional missile defense system would be more effective against North Korean missile launches and would share the burden of defense among allies.28 However, Seoul has been resistant to the concept of an integrated BMD system for several reasons: the desire, especially strong among progressive Koreans, for more strategic autonomy; a reluctance to irritate China, which has consistently voiced opposition to U.S. BMD deployments; and a disinclination to cooperate with Japan, based on the disputes described in previous sections. 27 Jay Solomon, Julian Barnes, and Alastair Gale, “North Korea Warned—U.S. Flies Stealth Bombers over Peninsula in Show of Might,” Wall Street Journal, March 29, 2013. 28 Paul McLeary, “Burden Sharing is the Future of Asian Missile Defense, Pentagon Official Says,” Defense News, May 28, 2014. Congressional Research Service 13 U.S.-South Korea Relations Congressional Concern about U.S. Troop Deployments In 2011, some Members of Congress raised strong concerns about existing plans to relocate U.S. bases in South Korea and “normalize” the tours of U.S. troops there, including longer stays with family members accompanying them. In May 2011, Senators Carl Levin, John McCain, and James Webb issued a statement that urged a reconsideration of the existing plans for U.S. military presence in the Asia Pacific, including the current agreements in South Korea. A Government Accountability Office (GAO) report requested by Members of the Senate Appropriations Committee released in May 2011 concluded that the Department of Defense had not demonstrated a “business case” to justify the tour normalization initiative, nor considered alternatives.29 In June 2011, the Senate Armed Services Committee passed amendments to the 2012 National Defense Authorization Act that prevents the obligation of any funds for tour normalization until further reviews of the plan are considered and a complete plan is provided to Congress. The National Defense Authorization Act for Fiscal Year 2013 (H.R. 4310/P.L. 112-239) includes a provision (Section 2107) that continues to prohibit funds for tour normalization. Proponents of the existing plans say that such changes could restrict U.S. military capabilities and readiness as well as jeopardize hard-fought agreements designed to make the U.S. military presence more politically sustainable in South Korea.30 For the time being, at least, the Department of Defense (DOD) has “stopped pursuing Tour Normalization as an initiative for Korea.”31 U.S. Alliance and ROK Defense Reform Plans Current security developments are taking place in the context of several concurrent defense plans. The June 2009 Obama-Lee summit produced the “Joint Vision for the Alliance,” which promised to enhance and globalize future defense cooperation. After the decision to delay the transfer of wartime operational control (Opcon) from U.S. to ROK forces, the operational “Strategic Alliance 2015” roadmap (announced in September 2010) outlined the new transition, including a path forward for improvements in ROK capabilities and changes to U.S. troop relocation and tour normalization. The U.S. military is also undergoing a broad transformation of its forces in the region; the 8th Army is moving toward becoming a war fighting headquarters that can deploy to other areas of the world while still serving as a deterrent to any possible aggression from North Korea.32 Meanwhile, South Korea’s Defense Reform 2020 bill passed by the National Assembly in 2006 laid out a 15-year, 621 trillion won (about $550 million) investment that aimed to reduce the number of ROK troops while developing a high-tech force and strengthening the Joint Chiefs of Staff system. In addition, a plan known as “Defense Reformation Plan 307” was intended to enhance collaboration among the ROK military branches. Responding to the North Korean provocations of 2010, the new “proactive deterrence” approach calls for a more flexible posture to respond to future attacks, as opposed to the “total war” scenario that has driven much of 29 Report found at http://www.gao.gov/products/GAO-11-316. Bruce Klingner, “Proposed Re-Realignment for Northeast Asia Ignores Strategic Realities,” Heritage Foundation WebMemo #3262, May 18, 2011. 31 U.S. Congress, Senate Committee on Armed Services, Advance Questions for Lieutenant General Curtis Scaparrotti, USA, Nominee to be Commander, United Nations Command/Combined Forces Command/United States Forces Korea, 113th Cong., 1st sess., July 30, 2013. 32 “U.S. Army in South Korea Begins Transformation of Forces,” Stars and Stripes. August 25, 2010. 30 Congressional Research Service 14 U.S.-South Korea Relations Seoul’s defense planning in the past. The defense reforms announced by the Park Administration in March 2014 aim to restructure the ground operations command, which will allow the South Korean military to conduct nimbler operations in response to low-intensity provocations.33 The reforms also plan to raise the pay of Korean military personnel while reducing the size of the force from the current 655,000 servicemembers to 522,000 by 2022. Despite these changes, the conservative Lee and Park Administrations have slowed significantly the defense budget increases planned under the earlier, progressive Roh Moo-hyun Administration (2003-2008). The Relocation of U.S. Forces Korea (USFK) In 2004, Secretary of Defense Donald Rumsfeld authorized a realignment program to reduce and relocate U.S. forces in South Korea. Under the Rumsfeld program, the Pentagon withdrew a 3,600-person combat brigade from the Second Division and sent it to Iraq. The Rumsfeld plan called for the U.S. troop level in South Korea to fall from 37,000 to 25,000 by September 2008. However, in 2008, Secretary of Defense Bob Gates halted the withdrawals at the level of 28,500. The realignment plan reflects the shift toward a supporting role for USFK and a desire to resolve the issues arising from the location of the large U.S. Yongsan base in downtown Seoul. The USFK base relocation plan has two elements. The first envisages the transfer of a large percentage of the 9,000 U.S. military personnel at the Yongsan base to U.S. Army Garrison (USAG) Humphreys, which is located near the city of Pyeongtaek some 40 miles south of Seoul. The second element involves the relocation of about 10,000 troops of the Second Infantry Division from the demilitarized zone to areas south of the Han River (which runs through Seoul). The end result would be that USFK’s sites will decline to 48, from the 104 it maintained in 2002. The bulk of U.S. forces will be clustered in the two primary “hubs” of Osan Air Base/USAG Humphreys and USAG Daegu that contain five “enduring sites” (Osan Air Base, USAG Humphreys, USAG Daegu, Chinhae Naval Base, and Kunsan Air Base). In late 2013, USFK Commander General Curtis Scaparrotti indicated that some “residual” staff may continue to fulfill the so-called “tripwire” function of U.S. forces stationed near the DMZ.34 South Korean defense officials maintain that no U.S. military units will be stationed north of Seoul. The relocations to Pyeongtaek originally were scheduled for completion in 2008, but have been postponed several times because of the slow construction of new facilities at Pyeongtaek and South Korean protests of financial difficulties in paying the ROK share of the relocation costs. The commander of the U.S. Army Corps of Engineers assessed that the entire troop realignment was 42% complete as of May 2014 and is on track to finish in 2017.35 The original cost estimate was over $10 billion; South Korea was to contribute $4 billion of this. Estimates in 2010 placed the costs at over $13 billion. In congressional testimony in September 2010, U.S. officials demurred from providing a final figure on the cost of the move, but confirmed that the South Koreans were paying more than the original $4 billion.36 The first battalion-sized element relocated from a base in Uijeongbu, north of Seoul, to USAG Humphreys in late December 33 Song Sang-ho, “Frontline Corps to Get Greater Command Role,” Korea Herald, March 6, 2014. Ser Myo-ja, “USFK May Keep Tripwire Function,” Korea JoongAng Daily, November 26, 2013. 35 Lee Chi-dong, “USFK Base Relocation Project on Track, but Some Details Still Being Discussed: Commander,” Yonhap News Agency, May 23, 2014. 36 “Senate Armed Services Committee Holds Hearing on Security Situation on the Korean Peninsula,” CQ Congressional Transcripts. September 16, 2010. 34 Congressional Research Service 15 U.S.-South Korea Relations 2012.37 In summer 2013, USFK broke ground for the new headquarters of the U.S.-Korea Command (KORCOM) and United Nations Command (UNC) in Pyeongtaek. The facility will become the command center for U.S. forces after the planned transfer of wartime operational control to South Korea. Figure 1. USFK Bases After Realignment Plan Is Implemented Source: Jane’s Sentinel Security Assessment - China and Northeast Asia, date posted April 15, 2010. Tour Normalization Another complicating factor in the development of the Yongsan Relocation Plan is the announcement by the Pentagon in 2008 that U.S. military families, for the first time, would be allowed to join U.S. military personnel in South Korea. Most U.S. troops in South Korea serve one-year unaccompanied assignments. The goal was to phase out one-year unaccompanied tours in South Korea, replacing them with 36-month accompanied or 24-month unaccompanied tours. Supporters of the plan argue that accompanied tours create a more stable force because of longer, more comfortable tours. Eventually, the “normalization” of tours is estimated to increase the size of the U.S. military community at Osan/Humphries near Pyeongtaek to over 50,000. However, in January 2013, USFK released a statement saying, “while improvements to readiness remain the command’s first priority, tour normalization is not affordable at this time.”38 An April 2013 Senate Armed Services Committee (SASC) report criticized the policy change as expensive and questioned the legality of how DOD calculated the housing allowance.39 37 “US Communication Battalion to Relocate to Camp Humphreys,” Korea Times, December 27, 2012. Ashley Rowland, “USFK: Program to Move Families to Korea ‘Not Affordable at This Time,’” Stars and Stripes, January 8, 2013. 39 U.S. Congress, Senate Committee on Armed Services, Inquiry into U.S. Costs and Allied Contributions to Support the U.S. Military Presence Overseas, 113th Cong., April 15, 2013, S.Rept. 113-12 (Washington: GPO, 2013). 38 Congressional Research Service 16 U.S.-South Korea Relations Cost Sharing Since 1991, South Korea has provided financial support through a series of Special Measures Agreements (SMAs) to offset the cost of stationing U.S. forces in Korea. In January 2014, Seoul and Washington agreed to terms for the next five-year SMA, covering 2014-2018. Under the new agreement, Seoul will raise its contribution by 6% to 920 billion Korean won ($867 million) in 2014 and then increase its annual payments at the rate of inflation. The new SMA also makes U.S. use of South Korean funds more transparent than in the past, in response to South Korean criticism. The ROK Ministry of Defense must approve every contract for which SMA funds are obligated, and USFK will submit an annual report on the SMA funds to the National Assembly. Even with these changes, Korean opposition lawmakers complained that the agreement is “humiliating” and that USFK might use SMA funds to finance portions of the relocation plan (see above) in violation of the 2004 agreement. According to the aforementioned SASC report, U.S. military non-personnel costs in South Korea totaled about $1.1 billion in 2012, and Korean SMA payments totaled 836 billion won ($765 million). In combination with that sum, other compensation outside the SMA (such as the South Korea contribution to base relocation) provides for about 40%-45% of the total non-personnel stationing costs for the U.S. troop presence.40 South Korean SMA payments have not kept pace with rising U.S. costs. The 2013 SASC report says that between 2008 and 2012 South Korea’s contributions grew by about $42 million (in line with the pace of inflation), while U.S. nonpersonnel costs increased by more than $500 million. Opcon Transfer The United States has agreed to turn over the wartime command of Korean troops to South Korea, but the two sides will likely postpone this transfer for several years. Under the current command arrangement, which is a legacy of U.S. involvement in the 1950-1953 Korean War, South Korea’s soldiers would be under the command of U.S. forces if there were a war on the peninsula. The plan to transfer wartime operational control was undertaken to recognize South Korea’s advances in economic and military strength since the Korean War and is seen by many as important for South Korean sovereignty. In 2007, Secretary Rumsfeld accepted a proposal by President Roh Moo-hyun to set up separate South Korean and U.S. military commands by April 2012. A U.S.-ROK operational control agreement will dismantle the U.S.-ROK Combined Forces Command (CFC), which has been headed by the U.S. commander in Korea. Separate U.S. and ROK military commands will be established. In accord with the plan, a new U.S. Korea Command (KORCOM) will be established. Under the Opcon agreement, a bilateral Military Cooperation Center will be responsible for planning military operations, joint military exercises, logistics support, and intelligence exchanges, and assisting in the operation of the communication, command, control, and computer systems. In 2010, the Opcon transfer was delayed after a series of provocations from North Korea and amid concerns about whether South Korean forces were adequately prepared to assume responsibility. As the new deadline of 2015 grew closer, concerns again emerged about the timing: in 2013, media outlets reported that officials in Seoul had asked Washington to delay the transfer. Reportedly, South Korean officials worry that their military is not fully prepared to cope 40 Figures provided by officials in Special Measures Agreement program at U.S. Forces Korea through e-mail correspondence with CRS. Congressional Research Service 17 U.S.-South Korea Relations with North Korean threats and that Pyongyang might interpret the Opcon transfer as a weakening of the alliance’s deterrence.41 Some military experts expressed concern that turning over control would lead to the United States reducing its overall commitment to South Korean security.42 In April 2014, the United States and South Korea announced in a joint statement that the allies would re-examine the timeline for Opcon transfer and determine the appropriate timing and conditions. USFK Commander General Scaparrotti testified to Congress that the transfer will be a “conditions-based process” and noted that the main areas of attention for the alliance will be informational awareness, command communications systems, ballistic missile defense, and munitions.43 Observers now believe that the Opcon transfer may not occur until 2020 or later. The “Strategic Flexibility” of USFK In 2007 and 2008, U.S. commanders in South Korea stated that the future U.S. role in the defense of South Korea would be mainly an air force and naval role. The ROK armed forces today total 655,000 troops, with about 520,000 of them in the Army and around 65,000 each in the Air Force and Navy. Since 2004, the U.S. Air Force has increased its strength in South Korea through the regular rotation into South Korea of advanced strike aircraft. These rotations are not a permanent presence, but the aircraft often remain in South Korea for weeks and sometimes months for training. Since the early 2000s, U.S. military officials have expressed a desire to deploy some U.S. forces in South Korea to areas of international conflicts under a doctrine of “strategic flexibility.” The South Korean government of Roh Moo-hyun resisted this idea, largely for fear it might entangle South Korea in a possible conflict between the United States and China. In the mid-2000s, the two governments reached an agreement in which South Korea recognized the United States’ intention to be able to deploy its forces off the Peninsula, while the United States in turn recognized that the troops’ return to South Korea would be subject to discussion. Among other elements, the compromise seems to imply that in an off-Peninsula contingency, U.S. forces might deploy but not operate from South Korea. Revision of South Korean Ballistic Missile Guidelines In October 2012, South Korea announced that the United States had agreed to allow South Korea to increase the maximum range of its ballistic missiles from 300 km (186 miles) to 800 km (500 miles) and to increase the payload limit from 500 kg (1,100 lbs.) to 1,000 kg (2,200 lbs.) if the range is reduced proportionately.44 The revised missile guidelines had reportedly been under negotiation for two years, following two conventional military attacks in 2010 by North Korea against South Korean military and civilian targets. The South Korean and U.S. governments characterized the revision as an effort to improve deterrence in response to the increased military threat of North Korea, particularly its ballistic missiles. In March 2014, South Korea tested a new 41 Song Sang-ho, “Allies Rack Brains over OPCON Transfer,” Korea Herald, May 6, 2014. Lee Chi-dong and Roh Hyo-dong, “OPCON Transfer May Usher in Withdrawal of U.S. Troops from Korea: ExGeneral,” Yonhap News Agency, November 18, 2013. 43 U.S. Congress, House Committee on Armed Services, Hearing on the Proposed Fiscal 2015 Defense Authorization for the U.S. Forces Korea and U.S. Strategic Command, 113th Cong., 2nd sess., April 2, 2014. 44 South Korea first agreed to ballistic missile range and payload restrictions in 1979 in exchange for U.S. technical assistance in missile development. The revised guidelines supersede bilateral agreements made in 1990 and 2001. 42 Congressional Research Service 18 U.S.-South Korea Relations ballistic missile with a 310-mile range, days after North Korea raised tensions with multiple missile launches of its own. The revised guidelines do not violate the Missile Technology Control Regime (MTCR), but critics argue that the United States has damaged its credibility to restrain other countries’ missile development, including North Korea’s. Other analysts have raised concerns about the impact of the agreement on the regional security environment in Northeast Asia.45 Some analysts view North Korea’s December 2012 rocket launch (using ballistic missile technology) partly as a response to the revised guidelines.46 Alliance politics may have encouraged Washington to acquiesce to Seoul’s demands.47 South Korean Defense Industry and Purchases of U.S. Weapon Systems South Korea is a major purchaser of U.S. weapon systems, taking delivery of $540 million worth of U.S. arms in calendar year 2011. The country is regularly among the top customers for Foreign Military Sales (FMS) and arranged large deals for 36 new AH-64E “Apache” attack helicopters and 14 refurbished CH-47D “Chinook” cargo helicopters in late 2013. Although South Korea generally buys the majority of its weapons from the United States, European and Israeli defense companies also compete for contracts; Korea is an attractive market because of its rising defense expenditures. According to Foreign Policy, however, U.S. officials are concerned that South Korea is exploiting U.S. defense technology in its indigenously produced equipment, some of which is exported to other countries.48 South Korea will reportedly purchase the Lockheed Martin F-35 Joint Strike Fighter to be its next main fighter aircraft, after the Ministry of Defense in September 2013 threw out the yearlong acquisition process that selected the Boeing F-15SE fighter.49 The cost of the F-35 had been too high for the original bid, according to reports, but Korean defense officials determined that only the F-35 met their requirements for advanced stealth capability. South Korea will purchase 40 F35 fighters at a total cost of $7.83 billion, with the first delivery of aircraft scheduled for 2018.50 Missile defense is an area of growing investment for the South Korean military. The ROK Navy has three destroyers with Aegis tracking software but no missile interceptors, and the ROK Army fields relatively unsophisticated PAC-2 interceptors, which are not suited for a ballistic missile defense role. The budget requested by the Ministry of National Defense for FY2014 includes significant funding to accelerate South Korea’s missile defense system; although most components will come from the United States, South Korea has decided to develop its own Korean Air and Missile Defense (KAMD) system instead of integrating with the U.S. regional ballistic missile defense network. As plans for the KAMD unfold, the South Korean military will 45 James Schoff, The New Missile Risk on the Korean Peninsula, Carnegie Endowment for International Peace, Commentary, Washington, DC, September 17, 2012, http://carnegieendowment.org/2012/09/17/new-missile-risk-onkorean-peninsula/dugs. 46 Tad Farrell, “Understanding North Korea’s Next Satellite Launch,” NK News, December 1, 2012. 47 Daniel Pinkston, “The New South Korean Missile Guidelines and Future Prospects for Regional Stability,” International Crisis Group, October 25, 2012, http://www.crisisgroupblogs.org/strongandprosperous/2012/10/25/thenew-south-korean-missile-guidelines-and-future-prospects-for-regional-stability/. 48 Gordon Lubold, “Is South Korea Stealing U.S. Military Secrets?” Foreign Policy, October 23, 2013, http://www.foreignpolicy.com/articles/2013/10/28/is_south_korea_stealing_us_military_secrets. 49 Ser Myo-ja, “Military Selects Lockheed Martin Fighter,” Korea JoongAng Daily, November 23, 2013. 50 “Military Selects Lockheed Martin Fighter,” JoongAng Ilbo, November 25, 2013. Congressional Research Service 19 U.S.-South Korea Relations reportedly seek to purchase PAC-3 interceptors, SM-2 surface-to-air missiles, and the more advanced SM-6 air defenses.51 South Korea also intends to purchase U.S. unmanned aerial vehicles (UAVs). Reportedly, the ROK military will buy four RQ-4 “Global Hawk” UAVs at a price of $845 million in total.52 Given concerns that the sale could violate the Missile Technology Control Regime (MTCR) and non-proliferation norms, observers have called on the Obama Administration to ensure that the Global Hawks are used strictly for reconnaissance and are not armed.53 Currently, the South Korean military only operates reconnaissance UAVs, but the Ministry of National Defense is budgeting $447 million to indigenously develop a combat UAV by 2021.54 The revised ballistic missile guidelines also increased the maximum allowable payload for South Korean UAVs to from 500 kg to 2,500 kg (5,500 lbs.), but the range is not limited by any international agreements. Korea’s Defense Reform 2020 legislation emphasizes the development of indigenous capabilities by increasing the percentage of funds allocated to defense research and development (R&D).55 South Korea aims to improve the competitiveness of its defense industry, but problems with the reliability of certain systems pose a challenge; South Korean firms compete internationally in the armored vehicle, shipbuilding, and aerospace industries.56 Of particular note is the T-50 Golden Eagle, a trainer and light fighter aircraft developed in conjunction with Lockheed Martin. The 110th Congress passed legislation that upgraded South Korea’s status as an arms purchaser from a Major Non-NATO Ally to the NATO Plus Three category (P.L. 110-429), which has become NATO Plus Five. This upgrade establishes a higher dollar threshold for the requirement that the U.S. executive branch notify Congress of pending arms sales to South Korea, from $14 million to $25 million. Congress has 15 days to consider the sale and take legislative steps to block the sale compared to 30 days for Major Non-NATO Allies. South Korea’s Regional Relations Looking at their surrounding neighborhood, South Koreans sometimes refer to their country as a “shrimp among whales.” South Korea’s relations with China and Japan, especially the latter, are fraught with ambivalence, combining interdependence and rivalry. Until 2013, trilateral cooperation among the three capitals generally had been increasing, particularly in the aftermath of the 2008 global financial crisis. Between 2009 and 2012, leaders of the three countries met annually in standalone summits, established a trilateral secretariat in Seoul, signed an investment agreement, and laid the groundwork for trilateral FTA negotiations to begin.57 In 2013, however, tensions between South Korea and Japan, and between China and Japan, froze much of this 51 Zachary Keck, “South Korea Goes All in on Missile Defense,” The Diplomat blog, July 26, 2013, http://thediplomat.com/flashpoints-blog/2013/07/26/south-korea-goes-all-in-on-missile-defense. 52 “Seoul to Sign Deal to Buy Global Hawks in First Half,” Yonhap News Agency, February 13, 2014. 53 “Drones for South Korea,” New York Times, Editorial. December 29, 2012. 54 Song Sang-ho, “U.S. Agrees to Extend Seoul’s Ballistic Missile Range: Reports,” Korea Herald, September 23, 2012. 55 “South Korea Defense Budget,” Jane’s Defence Budgets. December 14, 2009. 56 Simon Mundy, “South Korea Aims to Become Defence Powerhouse,” Financial Times, November 6, 2013. 57 From 1999 to 2007, trilateral summits were only held on the sidelines of the Association of Southeast Asian Nations’ “Plus Three” summit (which included the 10 ASEAN countries plus China, Japan, and South Korea). Congressional Research Service 20 U.S.-South Korea Relations burgeoning trilateral cooperation. One exception was the trilateral FTA negotiations, which were launched in March. Park Geun-hye often speaks of a Northeast Asian “paradox,” in which there is a “disconnect between growing economic interdependence on the one hand and backward political-security cooperation on the other.” To resolve this situation, Park has proposed a “Northeast Asian Peace and Cooperation Initiative” that would involve, among other items, Japan adopting a “correct understanding of history,” and the United States and China forging a “forward-looking relationship.”58 While the South Korean government has been vague about the proposal, a key part of Park’s vision appears to be to start by holding multilateral meetings with regional countries and the United States to discuss non-traditional security issues such as the environment, disaster relief, and nuclear safety. South Korea-Japan Relations U.S. policy makers have long voiced encouragement for enhanced South Korea-Japan relations. A cooperative relationship between the two countries, both U.S. treaty allies, and among the three is in U.S. interests because it arguably enhances regional stability, helps coordination over North Korea policy, and boosts each country’s ability to deal with the strategic challenges posed by China’s rise. However, despite increased cooperation, closeness, and interdependence between the South Korean and Japanese governments, people, and businesses over the past decade, mistrust on historical and territorial issues continues to linger. South Korea and Japan have competing claims to the small Dokdo/Takeshima islands in the Sea of Japan (called the East Sea by Koreans), and most South Koreans complain that Japan has not adequately acknowledged its history of aggression against Korea.59 For more than three generations beginning in the late 19th century, Japan intervened directly in Korean affairs, culminating in the annexation of the Korean peninsula in 1910. Over the next 35 years, Imperial Japan all but attempted to wipe out Korean culture.60 Among the victims were tens of thousands of South Korean “comfort women” who during the 1930s and 1940s were recruited, many if not most by coercive measures, into providing sexual services for Japanese soldiers. Whenever South Koreans perceive that Japanese officials are downplaying or denying this history, it becomes difficult for South Korean leaders to back initiatives to institutionalize improvements in bilateral ties. From 2008 to 2011, former President Lee sought to separate historical issues from the larger relationship. In this, he was aided by Japanese leaders from the Democratic Party of Japan (DPJ) who often tended to be more willing to acknowledge Imperial Japan’s actions against Korea and who placed a priority on improving relations with Seoul. Cemented for the first time in years by a common strategic outlook on North Korea, trilateral South Korea-U.S.-Japan coordination over North Korea policy was particularly close. People-to-people ties blossomed, with tens of thousands of Japanese and Koreans traveling to the other country every day. The South Korean 58 Park Geun-hye, “Remarks by to a Joint Session of Congress,” May 8, 2013; “A Plan for Peace in North Asia,” Wall Street Journal Opinion Asia, November 12, 2012. 59 Since the early 1950s, South Korea has administered Dokdo/Takeshima, which the U.S. government officially calls the “Liancourt Rocks.” 60 Many Koreans believe that the United States was complicit in this history, by reportedly informally agreeing in a 1905 meeting between U.S. Secretary of War William Taft and Japanese Prime Minister Taro Katsura that the United States would recognize Japan’s sphere of influence over Korea in return for Japan doing the same for the United States in the Philippines. Congressional Research Service 21 U.S.-South Korea Relations and Japanese militaries also stepped up their cooperation, including holding trilateral exercises with the United States. However, South Koreans’ interest in forming significant new institutional arrangements with Japan is dampened by three domestic factors in South Korea. First, continued suspicions of Japan among the South Korean population place political limitations on how far and how fast Korean leaders can improve relations. Second, continued disagreements over Dokdo/Takeshima’s sovereignty continue to weigh down the relationship. Third, unlike Japan, South Korea generally does not view China as an existential challenge and territorial threat. South Korea also needs Chinese cooperation on North Korea. Accordingly, South Korean leaders tend to be much more wary of taking steps that will alarm China. A factor that could change this calculation is if China is seen as enabling North Korean aggression. Indeed, North Korean acts of provocation are often followed by breakthroughs in ROK-Japan relations, as well as in ROK-U.S.-Japan cooperation. All three of these factors contributed to a dramatic downturn in South Korea-Japan relations in 2012. In May and again in June, the two sides were on the verge of signing a completed intelligence-sharing agreement long sought by the United States as a way to ease trilateral cooperation and dialogue. However, a firestorm of criticism against the pact in South Korea led the Lee government to cancel the signing minutes before it was to take place. Negotiations over a related deal on exchanging military supplies also broke down. Later that summer, President Lee made the first-ever visit by a South Korean president to Dokdo/Takeshima. Lee said his visit was in large measure a response to what he claimed was Japan’s failure to adequately acknowledge and address the suffering of the World War II comfort women. Congressional Research Service 22 U.S.-South Korea Relations Figure 2. Map of the Korean Peninsula Sources: Map produced by CRS using data from ESRI, and the U.S. Department of State’s Office of the Geographer. Notes: The “Cheonan Sinking” refers to the March 2010 sinking of a South Korean naval vessel, the Cheonan, killing over 40 ROK sailors. A multinational investigation led by South Korea determined that the vessel was sunk by a North Korean submarine. Yeonpyeong Island was attacked in November 2010 by North Korean artillery, which killed four South Koreans (two Marines and two civilians) and wounded dozens. * This map reflects geographic place name policies set forth by the United States Board on Geographic Names pursuant to P.L. 80-242. In applying these policies to the case of the sea separating the Korean Peninsula and the Japanese Archipelago, the Board has determined that the “Sea of Japan” is the appropriate standard name for use Congressional Research Service 23 U.S.-South Korea Relations in U.S. Government publications. The Republic of Korea refers to this body of water as the “East Sea.” It refers to the “Yellow Sea” as the “West Sea.” For more, see the “Sea of Japan/East Sea Naming Controvers” section. From this low base, relations worsened after the elections of Park Geun-hye and Abe Shinzo. Neither leader appears willing to be seen as compromising with the other. Moreover, the approaches of both leaders to historical issues appear to contradict one another and are locked in a vicious circle: Park seeks to bring Japan to a more full-throated acknowledgement and apology for its pre-WWII actions, and has linked other aspects of South Korea-Japan relations to the history issue. Meanwhile, Abe aims to restore Japanese pride in its history by erasing many signs of what many Japanese nationalists have regarded as self-flagellation, such as the portrayal of the early 20th century in history textbooks. Given the array of domestic forces opposed to raising South Korea-Japan relations to a new level, it is unclear whether the two governments will have the interest or capacity to do more than maintain ad hoc cooperation, such as in response to aggressive North Korean actions. Sea of Japan/East Sea Naming Controversy For centuries, South Korea and Japan have used different names to refer to the sea that lies between the main islands of the Japanese archipelago and mainland Asia. Japan refers to these waters as the “Sea of Japan,” while South Korea and North Korea refer to them as the “East Sea.”61 “Sea of Japan” is the name used in a majority of atlases, by most international institutions, and by most governments, including the United States government.62 The South Korean government urges the concurrent use of both names, perhaps for an interim period, until only “East Sea” is universally recognized.63 Japan opposes attempts to either replace the “Sea of Japan” with “East Sea” or to use both names concurrently. For many Koreans, the predominant use of “Sea of Japan” is a legacy of the period when Korea was under Japanese rule, because a number of key decisions about the world’s geographic names were made during the first half of the 20th century. In recent years, the South Korean government, South Korean citizens, and some Korean Americans appear to have been broadening their appeal to atlas publishers, U.S. federal government institutions, and the legislatures of some U.S. states such as Virginia and New York. The South Korean government states that there is a “steady increase” in maps using both names.64 The Japanese government states that the name Sea of Japan is “overwhelmingly” used.65 61 Other countries also use the name “East Sea” to refer to different bodies of water. For instance, the body of water commonly referred to as the “South China Sea” is referred to as the “East Sea” by Vietnam. 62 For instance, in 2012, the International Hydrographic Organization (IHO), an intergovernmental organization that creates widely-used reference sources on the names and borders of waters around the world, decided not to change its naming protocol of using only “Sea of Japan.” 63 The South Korean effort began in 1992, when shortly after they joined the United Nations, South Korea and North Korea began urging that “East Sea” be included on world maps. JoongAng Ilbo, “Gov’t Goes Easy on East Sea Renaming Demand,” May 2, 2011; International Hydrographic Organization, XVIIIth International Hydrographic Conference, April 23-27, 2012, Report of Proceedings, Volume I. 64 “East Sea: The Name from the Past, of the Present and for the Future,” 2012 pamphlet published by the South Korean Ministry of Foreign Affairs and Trade, and the Northeast Asian History Foundation. 65 “Sea of Japan: The One and Only Name Familiar to the International Community,” 2009 pamphlet published by the Japanese Ministry of Foreign Affairs. Congressional Research Service 24 U.S.-South Korea Relations In the United States, geographic place name policies for federal government agencies are set forth by the Board on Geographic Names (BGN), pursuant to P.L. 80-242. The BGN’s policy is that “a single conventional name, if one exists, will be chosen as the standard name” for seas and oceans. The BGN decides on what constitutes a “conventional name” by consulting various print and online geographic references to determine which name is “under widespread and current usage.”66 South Korea-China Relations Park Geun-hye has placed a priority on improving South Korea’s relations with China, which are generally thought to have been cool during Lee Myung-bak’s tenure. In June 2013, Park traveled to China for what was generally regarded as a successful visit that included meetings with Chinese President Xi Jinping. Since then, the two sides have expanded a number of high-level arrangements designed to boost strategic communication and dialogue. In June 2014, President Xi made a reciprocal visit to Seoul. Notably, his first visit to the Korean Peninsula as President was to South Korea, not to China’s ally, North Korea. One exception to the warming of ROK-China relations was Beijing’s creation of its East China Sea air defense identification zone (ADIZ) in November 2013. South Korea voiced strong displeasure with the Chinese ADIZ, which overlapped slightly with the existing South Korean ADIZ, and reportedly asked China in a meeting of defense officials to redraw the boundary. This request was denied, and South Korea decided to expand its own ADIZ, creating greater overlapping areas with the Chinese and Japanese ADIZs. Thus far, the ADIZ issue does not appear to have seriously damaged relations between Seoul and Beijing. China’s rise influences virtually all aspects of South Korean foreign and economic policy. North Korea’s growing economic and diplomatic dependence on China since the early 2000s has meant that South Korea must increasingly factor Beijing’s actions and intentions into its North Korea policy. China’s influence over North Korea has tended to manifest itself in two ways in Seoul. On the one hand, most South Korean officials worry that North Korea, particularly its northern provinces, is drifting into China’s orbit. For those on the political left in South Korea, this was an argument against Lee’s harder line stance toward inter-Korean relations, which they say has eroded much of South Korea’s influence over North Korea. On the other hand, China’s continued support for North Korea, particularly its perceived backing of Pyongyang after the Yeonpyeong Island shelling in 2010, has angered many South Koreans, particularly conservatives. China’s treatment of North Korean refugees, many of whom are forcibly repatriated to North Korea, has also become a bilateral irritant. Many South Korean conservatives also express concern that their Chinese counterparts have been unwilling to discuss plans for dealing with various contingencies involving instability in North Korea, though there were signs in 2013 and early 2014 that Beijing was becoming more willing to engage in these discussions. Park Geun-hye has called for establishing a trilateral strategic dialogue among Korea, the United States, and China.67 Since China’s 2001 entry into the World Trade Organization, China has emerged as South Korea’s most important economic partner. Over 20% of South Korea’s total trade is with China, twice the 66 United States Board on Geographic Names Foreign Names Committee, “Statement Regarding the US Board on Geographic Names’ Decision on the Name ‘Sea of Japan,’” approved by e-mail vote March 29, 2013. 67 Park Geun-hye, “Trustpolitik and the Making of a New Korea,” November 15, 2012. Congressional Research Service 25 U.S.-South Korea Relations level for South Korea-U.S. and South Korea-Japan trade.68 For years, China has been the number one location for South Korean firms’ foreign direct investment, and South Korea is negotiating a bilateral FTA with China. Yet, even as China is an important source of South Korean economic growth, it also looms large as an economic competitor. Indeed, fears of increased competition with Chinese enterprises have been an important motivator for South Korea’s push to negotiate a series of FTAs with other major trading partners around the globe. Some U.S. officials, including some Members of Congress, have raised concerns that the security of the U.S. military’s telecommunications infrastructure could be compromised by the plans of LG Uplus, South Korea’s third-largest mobile carrier, to buy equipment from Chinese telecom giant Huawei for an advanced wireless network.69 South Korea-Iran Relations70 In December 2012, the Obama Administration granted South Korea a 180-day extension of its exemption from U.S. sanctions on Iran as a result of South Korea’s curtailing of oil imports from Iran. P.L. 112-81, the National Defense Authorization Act for Fiscal Year 2012, places strict limitations on the U.S. operations of foreign banks that conduct transactions with Iran’s Central Bank. Foreign banks can be granted an exemption from sanctions if the President certifies that the parent country of the bank has significantly reduced its purchases of oil from Iran. South Korea is one of the largest importers of Iranian oil. Following extensive negotiations between the Obama and Lee governments in early 2012, South Korean imports of Iranian oil fell sharply. As of late 2013 they averaged around 40% the level that South Korea was importing in 2011. In response to these cutbacks, the Obama Administration has issued periodic waivers that exempt Seoul from U.S. sanctions that otherwise would apply because of South Korea’s continued imports of oil from Iran. Additionally, under a November 2013 interim agreement between Iran, the United States, and five other countries, from January 2014 to June 2014, the United States will pause its efforts to further reduce Iran’s crude oil sales, including sales to South Korea.71 Over the past decade, growing concerns over Iran’s nuclear program have led to increased U.S. scrutiny of South Korea’s long-standing trade with and investments in Iran. South Korea is one of the most important customers for Iranian oil.72 A number of South Korean conglomerates (called chaebol) have received significant contracts to build or service large infrastructure projects in Iran, including in Iran’s energy sector. Additionally, Iran has been a significant regional hub for thousands of smaller South Korean manufacturers, which ship intermediate goods to Iran that are then assembled into larger units and/or re-exported to other Middle Eastern countries. 68 Much of South Korea’s exports to China are intermediate goods that ultimately are used in products exported to the United States and Europe. 69 In the fall of 2013, Senators Dianne Feinstein and Robert Menendez reportedly wrote to the Obama Administration with concerns about the proposed deal. In 2012, the House Permanent Select Committee on Intelligence released a study titled “Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE,” which was critical of the Chinese firm. 70 For more information, see CRS Report RS20871, Iran Sanctions, by Kenneth Katzman. 71 State Department Fact Sheet, “Guidance Relating to the Provision of Certain Temporary Sanctions Relief in Order to Implement the Joint Plan of Action Reached on November 24, 2013,” January 20, 2014. 72 Iran data from Economist Intelligence Unit, Iran Country Report, April 2012. Congressional Research Service 26 U.S.-South Korea Relations Economic Relations South Korea and the United States are major economic partners. In 2013, two-way trade between the two countries totaled around $100 billion (see Table 1), making South Korea the United States’ sixth-largest trading partner. For some western states and U.S. sectors, the South Korean market is even more important. South Korea is far more dependent economically on the United States than the United States is on South Korea. In 2013, the United States was South Korea’s second-largest trading partner, second-largest export market, and the third-largest source of imports. It was among South Korea’s largest suppliers of foreign direct investment (FDI). As South Korea has emerged as a major industrialized economy, and as both countries have become more integrated with the world economy, economic interdependence has become more complex and attenuated. In particular, the United States’ economic importance to South Korea has declined relative to other major powers. In 2003, China for the first time displaced the United States from its perennial place as South Korea’s number one trading partner. Japan and the 28member European Union each also rival and have at times surpassed the United States as South Korea’s second-largest trading partner. South Korea’s export-driven economy and subsequent competition with domestic U.S. producers in certain products has also led to some trade frictions with the United States. For example, imports of certain South Korean products—mostly steel or stainless steel items as well as polyester, chemicals, and washing machines—have been the subject of U.S. antidumping and countervailing duty investigations. As of May 29, 2014, antidumping duties were being collected on 12 South Korean imports and countervailing duties were being assessed on 3 South Korean products, and there were 3 ongoing new investigations involving South Korean goods.73 In October 2011, the House and Senate passed H.R. 3080, the United States-Korea Free Trade Agreement Implementation Act, which was subsequently signed by President Obama.74 In March 2012, the U.S.-South Korea FTA (KORUS FTA) entered into force. The George W. Bush and Roh Moo-hyun Administrations initiated the KORUS FTA negotiations in 2006 and signed an agreement in June 2007.75 Upon the date of implementation of the KORUS FTA, 82% of U.S. tariff lines and 80% of South Korean tariff lines were tariff free in U.S.-South Korean trade, whereas prior to the KORUS FTA, 38% of U.S. tariff lines and 13% of South Korean tariff lines were duty free. By the 10th year of the agreement, the figures will rise to an estimated 99% and 98%, respectively, with tariff elimination occurring in stages and the most sensitive products having the longest phase-out periods. Non-tariff barriers in goods trade and barriers in services trade and foreign investment are to be reduced or eliminated under the KORUS FTA. At the time of this writing, the KORUS FTA had been in force for just over two years; therefore it is too early to ascertain its overall impact on U.S.-South Korean bilateral trade. Nevertheless, Table 1 below presents U.S.-South Korea merchandise trade data for selected years; total bilateral trade grew by around 2.9% in 2013 compared to 2012. U.S. exports to South Korea declined by 73 U.S. International Trade Commission (USITC), http://www.usitc.gov/trade_remedy/documents/orders.xls. The House vote was 278-151. In the Senate, the vote was 83-15. 75 For more on the KORUS FTA, see CRS Report RL34330, The U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications, coordinated by Brock Williams. 74 Congressional Research Service 27 U.S.-South Korea Relations around 1.3% in value, while U.S. imports from South Korea increased by around 5.9%. South Korea’s worldwide imports also declined during this period. Table 1. Annual U.S.-South Korea Merchandise Trade, Selected Years (billions of U.S. dollars) Year U.S. Exports U.S. Imports Trade Balance Total Trade 1990 14.4 18.5 -4.1 32.9 1995 25.4 24.2 1.2 49.6 2000 27.9 40.3 -12.4 68.2 2005 27.5 43.8 -16.3 71.3 2010 38.8 48.9 -10.1 87.7 2011 43.4 56.7 -13.3 100.1 2012* 42.3 58.9 -16.6 101.2 2013 41.7 62.4 -20.7 104.1 Major U.S. Export Items Semiconductors and semiconductor manufacturing equipment; civilian aircraft; chemical products; specialized devices; coal products; plastics; corn and wheat. Major U.S. Import Items Motor vehicles and parts; cell phones; computers, tablets, and their components; iron and steel; jet fuel and motor oil; tires. Source: Global Trade Atlas, accessed February 11, 2014. Notes: Exports based on total exports and imports based on general imports. (*) The KORUS FTA went into effect on March 15, 2012. South Korea’s Economic Performance South Korea was hit hard by the global financial crisis that began in late 2008, because of its heavy reliance on international trade and its banks’ heavy borrowing from abroad. Real GDP growth declined to 0.2% in 2009. However, the South Korean economy roared back and grew by 6.2% in 2010. The government took strong countermeasures to blunt the crisis’s impact, engaging in a series of fiscal stimulus actions worth about 6% of the country’s 2008 GDP, by some measures the largest such package in the Organization for Economic Cooperation and Development (OECD) group of industrialized countries. The Bank of Korea (BOK) also acted aggressively, lowering interest rates from over 5% to a record low 2% and engaging in a range of other operations, estimated by the OECD to be worth over 2.5% of GDP, designed to infuse liquidity in the Korean economy. The BOK negotiated currency swap agreements with the United States, Japan, and China.76 The South Korean won, after depreciating to around 1,500 won/dollar—a fall of nearly one-third from early 2008 to early 2009—has gradually strengthened against the dollar, to the 1,000-1,100 won/dollar range. The won’s depreciation in 2008 and 2009 helped to stimulate South Korea’s economic recovery by making its exports cheaper relative to many other currencies, particularly the Japanese yen. 76 The October 2008 swap agreement with the U.S. Federal Reserve gave Bank of Korea access to up to $30 billion in US dollar funds in exchange for won. Congressional Research Service 28 U.S.-South Korea Relations Since 2010, South Korean real GDP growth has slowed, in part due to a slowdown in its foreign trade and the won’s appreciation. South Korea’s economy is highly dependent upon capital inflows and exports, the latter of which are equal to around half of the country’s annual GDP. Thus, South Korea remains vulnerable to a slowdown in its major export markets: China, the United States, the European Union, and Japan. GDP growth in 2011 was 3.6%, 2% in 2012, and 3.0% in 2013. Although South Korea’s economic performance may look favorable to many around the world, complaints in South Korea have risen in recent years that only rich individuals and large conglomerates (called chaebol) have benefitted from the country’s growth since the 2008-2009 slowdown. The 2012 presidential election was largely fought over the issues of governance (in the wake of a number of corruption scandals), social welfare, and rising income inequality. Leading figures in both parties, as well as President Park and former President Lee, have proposed ways to expand South Korea’s social safety net. As mentioned in the politics section below, lower-than-expected growth for 2013 and 2014 has contributed to Park’s scaling back her plans. South Korea has one of the lowest rates of social welfare spending in the industrialized world. The rapid ageing of the South Korean population is expected to create additional financial pressures on government expenditures in the future. Nuclear Energy and Non-Proliferation Cooperation Bilateral Nuclear Energy Cooperation77 The United States and South Korea have cooperated in the peaceful use of nuclear energy for over 50 years.78 This cooperation includes commercial projects as well as R&D work on safety, safeguards, advanced nuclear reactors, and fuel cycle technologies. As mentioned in the introductory section of this report, the two countries have announced a two-year extension of their bilateral civilian nuclear cooperation agreement, often referred to as a “123 agreement,” which would have expired in March 2014.79 An extension of the agreement was approved by Congress (S. 1901) in January and passed into law (P.L. 113-81). Renewing the agreement is necessary because the existing agreement was concluded before the current requirements under Section 123a of the Atomic Energy Act (as amended) (AEA) were enacted, and the existing agreement does not meet all of the AEA’s requirements. One of the reasons Seoul and Washington decided on a two-year extension is to give more time to negotiators to work out a sticking point in the talks—how to treat fuel cycle issues. South Korea reportedly requested that the new agreement include a provision that would give permission in advance for U.S.-obligated spent nuclear fuel to be reprocessed to make new fuel using a type of reprocessing called pyroprocessing.80 The United States and South Korea are jointly researching 77 Written by Mary Beth Nikitin, Specialist in Nonproliferation. The original agreement for civilian nuclear cooperation was concluded in 1956, and amendments were made in 1958, 1965, 1972, and 1974. See also CRS Report R41032, U.S. and South Korean Cooperation in the World Nuclear Energy Market: Major Policy Considerations, by Mark Holt. 79 See also CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth D. Nikitin. Full text of the agreement is available at http://nnsa.energy.gov/sites/default/files/nnsa/inlinefiles/ Korea_South_123.pdf. 80 Daniel Horner, “South Korea, U.S. at Odds over Nuclear Pact,” Arms Control Today, September 2012, http://armscontrol.org/act/2012_09/Sout-Korea-US-at-Odds-Over-Nuclear-Pact. Under the 1978 Nuclear (continued...) 78 Congressional Research Service 29 U.S.-South Korea Relations pyroprocessing, but the technology is at the research and development stage.81 The Obama Administration would prefer to approve such activities on a case-by-case basis (referred to as “programmatic consent”), as is provided for under the current agreement. The South Korean government is reportedly also seeking confirmation in the renewal agreement of its right to build enrichment plants. For several decades, the United States has pursued a policy of limiting the spread of enrichment and reprocessing technology to new states as part of its nonproliferation policies.82 This is because enrichment and reprocessing can create new fuel or material for nuclear weapons. Advance permission to reprocess rarely has been included in U.S. nuclear cooperation agreements, and to date has only been granted to countries that already had the technology (such as to India, Japan, and Western Europe). However, the issue has become a sensitive one in the U.S.-ROK relationship. Many South Korean officials and politicians see the United States’ rules as limiting South Korea’s national sovereignty by requiring U.S. permission for civilian nuclear activities. This creates a dilemma for U.S. policy as the Obama Administration has been a strong advocate of limiting the spread of fuel cycle facilities to new states, and would prefer multilateral solutions to spent fuel disposal. Spent fuel disposal is a key policy issue for South Korean officials, and some see pyroprocessing as a potential solution. While reactor-site spent fuel pools are filling up, the construction of new spent fuel storage facilities is highly unpopular with the public. Some officials argue that in order to secure public approval for an interim storage site, the government needs to provide a long-term plan for the spent fuel. However, some experts point out that by-products of spent fuel reprocessing would still require long-term storage and disposal options. Other proponents of pyroprocessing see it as a way to advance energy independence for South Korea. For decades, the United States and South Korea have worked on joint research and development projects to address spent fuel. In the 1990s, the two countries worked intensely on research and development on a different fuel recycling technology (the “DUPIC” process), but this technology ultimately was not commercialized. In the past 10 years, joint research has centered on pyroprocessing. The Korean Atomic Energy Research Institute (KAERI) is conducting a laboratory-scale research program on reprocessing spent fuel with an advanced pyroprocessing technique. U.S.-South Korean bilateral research on pyroprocessing began in 2002 under the Department of Energy’s International Nuclear Energy Research Initiative (I-NERI). R&D work on pyroprocessing was temporarily halted by the United States in 2008, due to the proliferation sensitivity of the technology. In an attempt to find common ground and continue bilateral research, in October 2010 the United States and South Korea began a 10-year Joint Fuel Cycle Study on the economics, technical feasibility, and nonproliferation implications of spent fuel disposition, including pyroprocessing. In July 2013, a new agreement on R&D technology (...continued) Nonproliferation Act, consent rights apply to material originating in the U.S. or material that has been fabricated into fuel or irradiated in a reactor with U.S. technology. The majority of South Korea’s spent fuel would need U.S. consent before it could be reprocessed. 81 Reprocessing of spent nuclear fuel can be used to make new reactor fuel or to separate out plutonium in the spent fuel for weapons use. Pyroprocessing, or electro-refining, is a non-aqueous method of recycling spent fuel into new fuel for fast reactors. It only partially separates plutonium and uranium from spent fuel. There is debate over the proliferation implications of this technology. 82 For more, see CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth D. Nikitin. Congressional Research Service 30 U.S.-South Korea Relations transfer for joint pyroprocessing work in the United States took effect as part of the Joint Fuel Cycle Study.83 While the Korean nuclear research community argues for development of pyroprocessing technology, the level of consensus over the pyroprocessing option among Korean government agencies, electric utilities, and the public remains uncertain. Generally, there appears to be support in South Korea for research and development of the technology. Some analysts are concerned about the economic and technical viability of commercializing the technology. While the R&D phase would be paid for by the government, the private sector would bear the costs of commercialization. At a political level, pyroprocessing may have more popularity as a symbol of South Korean technical advancement and the possibility of energy independence. Some argue that South Korea should have the independent ability to provide fuel and take back waste from new nuclear power countries in order to increase its competitive edge when seeking power plant export contracts. The Park Administration is conducting a review of the country’s spent fuel policies. Some analysts critical of the development of pyroprocessing in South Korea point to the 1992 Joint Declaration, in which North and South Korea agreed they would not “possess nuclear reprocessing and uranium enrichment facilities” and are concerned about the impact of South Korea’s pyroprocessing on negotiations with the North. Others emphasize that granting permission for pyroprocessing in South Korea would contradict U.S. nonproliferation policy to halt the spread of sensitive technologies to new states. Some observers, particularly in South Korea, point out that the United States has given India and Japan consent to reprocess, and argue that they should be allowed to develop this technology under safeguards. South Korea and the United States have several options on how to treat this issue in the negotiations over a new nuclear cooperation agreement. One option would be to renew the agreement without granting any prior consent, and apply for programmatic consent in the future as required (i.e., the same provisions as the current agreement). Another would be for South Korea to seek long-term advance consent for pyroprocessing. Alternatively, South Korea could seek programmatic consent for research and development of the technology and could then ask for further consent for commercialization if it decided to go that route at a future date. Since the technology has not been commercialized anywhere in the world, the United States and the International Atomic Energy Agency (IAEA) are working with the South Korean government to develop appropriate IAEA safeguards should the technology be developed further. Whether pyroprocessing technology can be sufficiently monitored to detect diversion to a weapons program is a key aspect of the Joint Study. South Korean Nonproliferation Policy South Korea has been a consistent and vocal supporter of strengthening the global nonproliferation regime, which is a set of treaties, voluntary export control arrangements, and other policy coordination mechanisms that work to prevent the spread of nuclear, biological, and chemical weapons and their delivery systems. South Korea destroyed all of its chemical weapons stocks by 2008, under the Chemical Weapons Convention.84 South Korea is a member of the 83 Federal Register, Vol. 708, No. 105, May 31, 2013. South Korea has not recognized this stockpile publicly, and chose to destroy the weapons under the CWC (continued...) 84 Congressional Research Service 31 U.S.-South Korea Relations Nuclear Suppliers’ Group (NSG), which controls sensitive nuclear technology trade, and adheres to all international nonproliferation treaties and export control regimes. South Korea also participates in the G-8 Global Partnership, and other U.S.-led initiatives—the Proliferation Security Initiative, the International Framework for Nuclear Energy Cooperation (formerly GNEP), and the Global Initiative to Combat Nuclear Terrorism. South Korea has contributed $1.5 million to the United States’ nuclear smuggling prevention effort, run by the Department of Energy, as part of its G8 Global Partnership pledge.85 South Korea has also contributed to the Organization for the Prohibition of Chemical Weapons (OPCW) Trust Fund to support the destruction of Syrian chemical weapons. An Additional Protocol (AP) to South Korea’s safeguards agreement with the International Atomic Energy Agency (IAEA) entered into force as of February 2004. This gives the IAEA increased monitoring authority over the peaceful use of nuclear technology. In the process of preparing a more complete declaration of nuclear activities in the country, the Korean Atomic Energy Research Institute (KAERI) disclosed previously undeclared experiments in its research laboratories on uranium enrichment in 2000, and on plutonium extraction in 1982. The IAEA Director General reported on these undeclared activities to the Board of Governors in September 2004, but the Board did not report them to the U.N. Security Council. In response, the Korean government reconfirmed its cooperation with the IAEA and commitment to the peaceful use of nuclear energy, and reorganized the oversight of activities at KAERI. The experiments reminded the international community of South Korea’s plans for a plutonium-based nuclear weapons program in the early 1970s under President Park Chung-hee, the father of the current President Park. Deals to acquire reprocessing and other facilities were canceled under intense U.S. pressure, and Park Chung-hee eventually abandoned weapons plans in exchange for U.S. security assurances. The original motivations for obtaining fuel cycle facilities as well as the undeclared experiments continue to cast a shadow over South Korea’s long-held pursuit of the full fuel cycle. As a result, since 2004, South Korea has aimed to improve transparency of its nuclear programs and participate fully in the global nonproliferation regime. In addition, the 1992 Joint Declaration between North and South Korea says that the countries “shall not possess nuclear reprocessing and uranium enrichment facilities.” Since North Korea has openly pursued both of these technologies, an intense debate is underway over whether South Korea should still be bound by those commitments. Some analysts believe that an agreement with North Korea on denuclearization could be jeopardized if South Korea does not uphold the 1992 agreement. Of recent significance, South Korea hosted the 2012 Nuclear Security Summit, a forum initiated by President Obama shortly after his inauguration. This was the second such summit after the 2010 Washington, DC, event. The South Korean government agreed to host the summit because it fit into the “Global Korea” concept of international leadership and summitry; it was a chance for the South Korean nuclear industry to showcase its accomplishments; and the South Korean government was able to emphasize South Korea’s role as a responsible actor in the nuclear field, in stark contrast with North Korea. It was also an important symbol of trust between the U.S. and South Korean Presidents. (...continued) confidentiality provisions. “South Korea Profile,” Nuclear Threat Initiative, http://www.nti.org/country-profiles/southkorea/ 85 “Republic of Korea Increases Support of NNSA Work to Combat Nuclear Smuggling,” NNSA Press Release, January 2, 2013, http://www.nnsa.energy.gov/mediaroom/pressreleases/koreacontributions010213. Congressional Research Service 32 U.S.-South Korea Relations South Korean Politics As of early 2014, South Korean politics continued to be dominated by Park Geun-hye (born in 1952) and her conservative Saenuri (“New Frontier”) Party (NFP), which controls the legislature. Ms. Park was elected in December 2012, becoming not only South Korea’s first woman president, but also the first presidential candidate to receive more than half of the vote (she captured 51.6%) since South Korea ended nearly three decades of authoritarian rule in 1988. She will serve until February 2018. By law, South Korean presidents serve a single five-year term. Park is the daughter of the late Park Chung-hee, who ruled South Korea from the time he seized power in a 1961 military coup until his assassination in 1979. According to the Asan Institute’s daily polling service, Park’s public approval ratings were in the 60%-70% range for much of 2013, in part due to positive assessments of her handling of foreign affairs, particularly inter-Korean relations. However, her poll numbers declined to the 50% range by the end of the year, due to a number of factors, including a perception that her government had done little to follow through on her campaign pledges to overcome South Korea’s economic difficulties and strengthen its social safety net; the mounting evidence that the country’s intelligence service had tried to influence the 2012 presidential election in her favor (though no evidence has surfaced that Park knew of the matter); and her government’s handling of a railway strike. In particular, Park’s favorability ratings have fallen among voters under 40, a development that many expected; in the 2012 election under-40 voters chose Park’s opponent, the Democratic United Party’s Moon Jae-In, by a wide margin. Likewise, those over 50 overwhelmingly voted for Park and continue to be her strongest base of support. A Short History of South Korean Presidential Changes For most of the first four decades after the country was founded in 1948, South Korea was ruled by authoritarian governments. The most important of these was led by President Park’s father, Park Chung-hee, a general who seized power in a military coup in 1961 and ruled until he was murdered by his intelligence chief in 1979. The elder Park’s legacy is a controversial one. On the one hand, he orchestrated the industrialization of South Korea that transformed the country from one of the world’s poorest. On the other hand, he ruled with an iron hand and brutally dealt with real and perceived opponents, be they opposition politicians, labor activists, or civil society leaders. For instance, in the early 1970s South Korean government agents twice tried to kill then-opposition leader Kim Dae-jung, who in the second attempt was saved only by U.S. intervention. The divisions that opened under Park continue to be felt today. Conservative South Koreans tend to emphasize his economic achievements, while progressives focus on his human rights abuses. Ever since the mid-1980s, when widespread anti-government protests forced the country’s military rulers to enact sweeping democratic reforms, democratic institutions and traditions have deepened in South Korea. In 1997, longtime dissident Kim Dae-jung was elected to the presidency, the first time an opposition party had prevailed in a South Korean presidential election. In December 2002, Kim was succeeded by a member of his left-of-center party: Roh Moo-hyun, a self-educated former human rights lawyer who emerged from relative obscurity to defeat establishment candidates in both the primary and general elections. Roh campaigned on a platform of reform—reform of Korean politics, economic policymaking, and U.S.-ROK relations. He was elected in part because of his embrace of massive anti-American protests that ensued after a U.S. military vehicle killed two Korean schoolgirls in 2002. Like Kim Daejung, Roh pursued a “sunshine policy” of largely unconditional engagement with North Korea that clashed with the harder policy line pursued by the Bush Administration until late 2006. Roh also alarmed U.S. policy makers by speaking of a desire that South Korea should play a “balancing” role among China, the United States, and Japan in Northeast Asia. Despite this, under Roh’s tenure, South Korea deployed over 3,000 non-combat troops to Iraq—the third-largest contingent in the international coalition—and the two sides initiated and signed the KORUS FTA. In the December 2007 election, former Seoul mayor Lee Myung-bak’s victory restored conservatives to the presidency. Among other items, Lee was known for ushering in an unprecedented level of cooperation with the United States over North Korea and for steering South Korea through the worst of the 2008-2009 global financial Congressional Research Service 33 U.S.-South Korea Relations crisis. Under the slogan “Global Korea,” he also pursued a policy of expanding South Korea’s participation in and leadership of various global issues. During the final two years of his presidency, however, Lee’s public approval ratings fell to the 25%-35% level, driven down by—among other factors—a series of scandals surrounding some of his associates and family members, and by an increasing concern among more Koreans about widening income disparities between the wealthy and the rest of society. Since the end of military rule in 1988, every former South Korean president has been involved in scandal and in some cases criminal investigation within several months of leaving office. A Powerful Executive Branch Nominally, power in South Korea is shared by the president and the 300-member unicameral National Assembly. Of these, 246 members represent single-member constituencies. The remaining 54 are selected on the basis of proportional voting. National Assembly members are elected to four-year terms. The president and the state bureaucracy continue to be the dominant forces in South Korean policymaking, as formal and informal limitations prevent the National Assembly from initiating major pieces of legislation. Political Parties Presently, there are two major political parties in South Korea: President Park’s conservative Saenuri Party (which has been translated as “New Frontier Party” or NFP) and the opposition, center-left New Politics Alliance for Democracy (NPAD).86 U.S. ties have historically been much stronger with South Korea’s conservative parties. The NFP has controlled the Blue House (the residence and office of South Korea’s president) and the National Assembly since 2008. In the last National Assembly elections, held in April 2012, the NFP—under the leadership of Park Geun-hye—shocked nearly all observers by winning a slim majority. (See Figure 3.) For much of 2011, virtually all the political winds appeared to be blowing in favor of the opposition, left-of-center parties, and many predicted they would achieve a sweeping victory.87 Thus, even though the main opposition group now known as the NPAD increased its seat tally by nearly 50%, to 127, the April vote was considered a humiliating defeat, and the party’s leadership resigned soon thereafter. Although the NFP retained control of the Assembly, its narrow majority could make it vulnerable if it loses any of its members. 86 The Saenuri Party formerly was known as the Grand National Party (GNP). The New Politics Alliance for Democracy formerly was known as the Democratic Party. 87 Among the many signs of this trend: the progressive parties soundly defeated the ruling party in April 2011 legislative by-elections, a left-of-center activist (Park Won-Soon) won a vote for the Seoul mayoralty in October; the approval ratings for President Lee and his party plummeted, due in part to a series of scandals; and in late 2011 and early 2012 Korea’s major progressive parties either merged or decided to cooperate during the April National Assembly elections. Congressional Research Service 34 U.S.-South Korea Relations Figure 3. Party Strength in South Korea’s National Assembly As of March 2014 Notes: President Park Geun-hye is from the Saenuri (New Frontier) Party. The last nationwide legislative elections were held in April 2012. The next elections are scheduled for April 2016. South Korea’s next presidential election is scheduled for December 2017. By law, South Korean presidents are limited to one fiveyear term. South Korea’s progressive political parties—now largely consolidated in the NPAD—controlled the Blue House for 10 years, from 1998 to 2008. For a four-year period, from 2004 to 2008, a progressive party was the largest political group in in the National Assembly and held a majority for part of that period. After failing to retake the Blue House or National Assembly in 2012, the progressive camp faces several more years without significant tools of power and influence within the South Korean polity. In a move that may have an impact on the 2016 National Assembly and 2017 presidential elections, a popular independent National Assemblyman, Ahn Cheol-Su, joined forces with the then-Democratic Party to form the NPAD. In the past, the NPAD’s predecessor parties have advocated positions that, if adopted, could pose challenges for the Obama Administration’s Korea policy, including calling for the renegotiation of some provisions of the KORUS FTA, and adopting a more conciliatory approach to North Korea. Selected CRS Reports on the Koreas South Korea CRS Report RL34330, The U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications, coordinated by Brock Williams CRS Report R41032, U.S. and South Korean Cooperation in the World Nuclear Energy Market: Major Policy Considerations, by Mark Holt CRS Report RL34093, The Kaesong North-South Korean Industrial Complex, by Mark E. Manyin and Dick K. Nanto Congressional Research Service 35 U.S.-South Korea Relations North Korea CRS Report R41259, North Korea: U.S. Relations, Nuclear Diplomacy, and Internal Situation, by Emma Chanlett-Avery and Ian E. Rinehart CRS Report RL34256, North Korea’s Nuclear Weapons: Technical Issues, by Mary Beth D. Nikitin CRS Report R41438, North Korea: Legislative Basis for U.S. Economic Sanctions, by Dianne E. Rennack CRS Report R40095, Foreign Assistance to North Korea, by Mark E. Manyin and Mary Beth D. Nikitin CRS Report RS21473, North Korean Ballistic Missile Threat to the United States, by Steven A. Hildreth CRS Report R41843, Imports from North Korea: Existing Rules, Implications of the KORUS FTA, and the Kaesong Industrial Complex, coordinated by Mark E. Manyin CRS Report RL30613, North Korea: Back on the Terrorism List?, by Mark E. Manyin CRS Report RL32493, North Korea: Economic Leverage and Policy Analysis, by Dick K. Nanto and Emma Chanlett-Avery CRS Report RS22973, Congress and U.S. Policy on North Korean Human Rights and Refugees: Recent Legislation and Implementation, by Emma Chanlett-Avery Author Contact Information Mark E. Manyin Specialist in Asian Affairs mmanyin@crs.loc.gov, 7-7653 William H. Cooper Specialist in International Trade and Finance wcooper@crs.loc.gov, 7-7749 Mary Beth D. Nikitin Specialist in Nonproliferation mnikitin@crs.loc.gov, 7-7745 Ian E. Rinehart Analyst in Asian Affairs irinehart@crs.loc.gov, 7-0345 Emma Chanlett-Avery Specialist in Asian Affairs echanlettavery@crs.loc.gov, 7-7748 Congressional Research Service 3654,800; North Korea = $1,800) Source: CIA, The World Factbook, May 28, 2015. The Overall State of U.S.-South Korea Relations Since 2008, relations between the United States and South Korea (known officially as the Republic of Korea, or ROK) arguably have been at their most robust since the formation of the U.S.-ROK alliance in 1953. Cooperation on North Korea policy has been particularly close. President Park Geun-hye and her predecessor, Lee Myung-bak, spoke before joint sessions of Congress, in May 2013 and October 2011, respectively, and in 2011 Congress approved the South Korea-U.S. Free Trade Agreement (KORUS FTA), the United States’ second-largest FTA, after the North America Free Trade Agreement (NAFTA). Notwithstanding the positive state of the relationship, in the coming months U.S.-South Korea ties could be tested by developments in areas where the two countries occasionally disagree, most prominently how best to handle South Korea-Japan relations and how to respond to Japan’s efforts to expand the role of its military. 2015 marks the 50th anniversary of the normalization of South Korea-Japan relations and the 70th anniversary of the end of World War II and the liberation of the Korean Peninsula from its colonization by Imperial Japan, drawing attention to a legacy 1 The purchasing power parity method of calculating GDP accounts for how much people can buy for their money in a given country. Instead of simply measuring total output, the PPP GDP method attempts to gauge how much a person would have to pay in the local currency for a set basket of goods. That amount is then converted to the equivalent value in U.S. dollars, so that analysts can make cross-country standard of living comparisons. c11173008 Congressional Research Service 1 U.S.-South Korea Relations . that continues to bedevil bilateral relations between Seoul and Tokyo. President Park has promoted a number of initiatives with North Korea that may go against the grain of U.S. policies that increase pressure on Pyongyang, though she has been careful to keep these proposals modest and to condition larger-scale initiatives on fundamental changes in the North Korean government’s behavior. Additionally, many South Korean officials have a different strategic view of China than their U.S. counterparts, often leading them to avoid taking steps or making statements that antagonize Beijing. MERS Outbreak Leads President Park to Postpone Summit President Park was scheduled to travel to the United States for a summit with President Obama in mid-June 2015, her first visit to the United States since May 2013. President Obama last visited South Korea in April 2014. Less than a week before Park’s scheduled departure, however, she announced that she was postponing the trip due to an outbreak of Middle East Respiratory Syndrome (MERS).2 As of June 9 MERS was blamed for nine deaths and over 100 confirmed cases in South Korea. Park’s government had come under criticism—including from members of her political party—for an allegedly belated and inadequate initial response to the outbreak, particularly in reportedly waiting more than two weeks after confirmation of the first MERS case to disclose the names of hospitals and clinics where confirmed MERS infections had occurred.3 The criticism echoes similar reactions to the Park government’s response to a ferry disaster that killed hundreds in April 2014. (See the section on “Park Geun-hye’s Political Standing,” below.) On June 11, the Bank of Korea announced a quarter-point cut in South Korea’s base interest rate in part because the MERS outbreak was causing a contraction in domestic consumption.4 Cooperation over North Korea Policy5 Dealing with North Korea is the dominant strategic element of the U.S.-South Korean relationship. Since 2009, U.S.-ROK coordination over North Korea policy has been close, with the two allies essentially forging a joint approach toward North Korea that contains elements of pressure against and cooperation with Pyongyang. The U.S. and South Korea have placed significant emphasis on the harder elements of their approach, including strengthening their deterrence posture, calling attention to North Korea’s human rights violations, and refusing to meet North Korean demands on issues such as scaling back U.S.-ROK military exercises. Many critics have said that the Obama Administration’s approach is too passive, with some observers charging that it applies insufficient pressure and others arguing that it provides insufficient incentives for Pyongyang to change its behavior. 6 (See “North Korea in U.S.-ROK Relations” below.) 2 For more on MERS, see CRS Report R43584, Middle East Respiratory Syndrome (MERS): Is It a Health Emergency?, by Sarah A. Lister. 3 Choe Sang-Hun, “MERS Virus’s Path: One Man, Many South Korean Hospitals,” New York Times, June 8, 2015. 4 The Bank of Korea, “Monetary Policy Decision,” June 11, 2015. 5 For more on North Korea issues, see CRS Report R41259, North Korea: U.S. Relations, Nuclear Diplomacy, and Internal Situation, by Emma Chanlett-Avery and Ian E. Rinehart; and CRS Report RL34256, North Korea’s Nuclear Weapons: Technical Issues, by Mary Beth D. Nikitin. 6 David Sanger, “U.S. Confronts Consequences of Underestimating North Korean Leader,” New York Times, April 24, 2014. c11173008 Congressional Research Service 2 U.S.-South Korea Relations . Figure 1. Map of the Korean Peninsula Sources: Map produced by CRS using data from ESRI, and the U.S. Department of State’s Office of the Geographer. Notes: The “Cheonan Sinking” refers to the March 2010 sinking of a South Korean naval vessel, the Cheonan, killing over 40 ROK sailors. A multinational investigation led by South Korea determined that the vessel was c11173008 Congressional Research Service 3 U.S.-South Korea Relations . sunk by a North Korean submarine. Yeonpyeong Island was attacked in November 2010 by North Korean artillery, which killed four South Koreans (two Marines and two civilians) and wounded dozens. * This map reflects geographic place name policies set forth by the United States Board on Geographic Names pursuant to P.L. 80-242. In applying these policies to the case of the sea separating the Korean Peninsula and the Japanese Archipelago, the Board has determined that the “Sea of Japan” is the appropriate standard name for use in U.S. Government publications. The Republic of Korea refers to this body of water as the “East Sea.” It refers to the “Yellow Sea” as the “West Sea.” Inter-Korean Relations In the first half of 2015, Park has continued to unveil details of her “trustpolitik” plan for reducing tensions on the Korean Peninsula and establishing the foundation for re-unification. Relations between the two Koreas have been especially poor since 2010, when two military attacks by North Korea on South Korea resulted in Park’s predecessor Lee Myung-bak halting nearly all regular inter-Korean interchange.7 According to Park’s vision, South Korea will encourage North Korea to behave more cooperatively by strengthening South Korea’s defense capabilities, applying pressure on Pyongyang, and providing incentives for the forging of trust between the two Koreas. As part of the last item, Park has promoted a range of dialogues and projects with North Korea, generally on a relatively small scale. Thus far, North Korea generally has resisted Park’s outreach. The Kim Jong-un regime may feel particularly threatened by Park’s calls for South Korea to prepare for and welcome reunification, which Park appears to assume will occur largely on South Korea’s terms. The Obama Administration publicly has backed Park’s trustpolitik strategy and appears comfortable letting Seoul take the lead in trying to encourage more cooperative behavior from Pyongyang. However, in the future, some of the cooperative elements of Park’s approach toward North Korea could conflict with U.S. policy due to an inherent tension that exists in the two countries’ views of Pyongyang. The United States’ predominant concern is North Korea’s weapons of mass destruction (WMD) programs while South Korea’s top priorities are WMD issues and promoting unification. H.R. 757, the North Korea Sanctions Enforcement Act, could conflict with some of Park’s initiatives, such as her stated desire to “internationalize” the interKorean Kaesong Industrial Complex by attracting multinational investors.8 (For more on cooperation over North Korea and inter-Korean relations, see “North Korea in U.S.-ROK Relations,” below.) South Korea-Japan Relations Stabilize, but Remain Tense South Korea’s relations with Japan have been strained since 2012. This limits U.S. policy options in Northeast Asia and periodically causes tensions between Washington and one or both of its two allies in Northeast Asia. Seoul and Tokyo disagree over how Imperial Japan’s actions in the early 7 In March 2010, a South Korean naval vessel, the Cheonan, sank, killing over 40 ROK sailors. A multinational investigation led by South Korea determined that the vessel was sunk by a North Korean submarine. In November 2010, North Korea launched an artillery attack on Yeonpyeong Island, killing four South Koreans (two Marines and two civilians) and wounding dozens. 8 The KIC is located near the North Korean city of Kaesong. It houses over 120 South Korean manufacturers, which employ over 50,000 North Korean workers. c11173008 Congressional Research Service 4 U.S.-South Korea Relations . 20th century should be handled in contemporary relations. The relationship is also challenged by conflicting territorial claims and strategic and economic competition. However, relations between Seoul and Tokyo have improved modestly since the fall of 2014. Bilateral working-level discussions have increased, and regular high-level bilateral meetings resumed in 2014 and have built up to the Cabinet level. In another sign of a bilateral thaw, in December 2014 the United States, South Korea, and Japan signed a modest trilateral information sharing agreement. Additionally, despite many private statements by South Korean officials expressing concern about Japanese “remilitarization,” the Park government officially does not appear to have objected in principle to Japan’s historic moves to expand the scope of its military’s activities.9 Earlier in her term, Park insisted that Japan adopt a “correct understanding of history” as a prerequisite for nearly all cooperative initiatives.10 However, increasingly since the middle of 2014, her government has relaxed this position and adopted more of a two-track approach, separating disputes over history from most other aspects of the relationship. South Korea’s change in behavior appears to have been influenced by shifts in the correlation of powers in Northeast Asia that made Park’s former stance less tenable: for example, high-level SinoJapanese ties, which had also been frozen for months, reopened in November 2014, and U.S.Japanese ties have deepened in the first half of 2015, as symbolized during Prime Minister Shinzo Abe’s April 2015 visit to the United States.11 U.S. pressure to improve ties and Abe’s avoidance of historically sensitive comments or moves also may have contributed to Seoul’s apparent adjustment in tone. Despite the thaw, bilateral relations remain generally tense. Park and Abe have yet to hold a formal summit meeting. Following Abe’s April 2015 speech to a joint meeting of Congress, Park’s government issued a statement saying that it was “deeply regrettable” that Abe had not addressed historical grievances between Japan and South Korea.12 As of early June 2015, months of bilateral negotiations do not appear to have produced a breakthrough in how to resolve disagreements over whether and how Japan should again acknowledge and address the suffering of the so-called “comfort women,” who were forced to provide sexual services to Japanese soldiers during Imperial Japan’s conquest and colonization of several Asian countries in the 1930s and 1940s, including Korea. The ongoing opportunity costs to the United States have led some policy analysts to call for the United States to become more directly involved in trying to improve relations between the two sides.13 Two developments to watch in summer 2015 are how the two countries mark the 50th anniversary of their June 22, 1965, normalization treaty and the content of Prime Minister Abe’s expected statement commemorating the 70th anniversary of the end of World War II. If past statements by Abe’s predecessors are any guide, he is likely to issue his statement on or around August 15, the date of Imperial Japan’s surrender. (For more, see “South Korea’s Regional Relations,” below.) 9 For instance, see South Korean Ministry of Foreign Affairs Press Briefing by Spokesperson and Deputy Minister for Public Relations, Noh Kwang-il, May 14, 2015. 10 Alastair Gale, “South Korea’s Park Chides Abe but Seeks Stable Japan Ties,” Wall Street Journal, May 4, 2015. 11 For more, see CRS Report RL33436, Japan-U.S. Relations: Issues for Congress, coordinated by Emma ChanlettAvery. 12 South Korean Ministry of Foreign Affairs, “MOFA Spokesperson’s Statement on the Japanese Prime Minister’s Address to the US Congress,” April 30, 2015. 13 See, for instance, Brad Glosserman and Scott Snyder, The Japan-South Korea Identity Clash East Asian Security and the United States (New York: Columbia University Press), May 2015. c11173008 Congressional Research Service 5 U.S.-South Korea Relations . South Korea Expresses Interest in TPP In South Korea has continued to express a desire to join the twelve-nation Trans-Pacific Partnership (TPP) free trade agreement (FTA) talks.14 In fall 2013, after months of speculation, the South Korean government signaled its “interest” in joining the negotiations. Since that time, it has taken several of the domestic steps necessary for it to officially announce its intent to apply to join the TPP negotiations, and it has engaged in multiple rounds of consultations with the twelve TPP countries, including the United States. The size and strategic importance of the proposed TPP would expand significantly if South Korea—East Asia’s third-largest economy—enters the negotiations, although South Korea’s entry may not have a significant impact on U.S.-South Korea trade flows given the existing bilateral U.S.-South Korea FTA (KORUS). One of Park’s top policy agendas is reviving the country’s economy. To this end, her government has initiated a trade strategy of entering into more FTAs, thereby making South Korea a “linchpin” of accelerated economic integration in the region.15 South Korea is negotiating a number of FTAs, including a bilateral agreement with China that the two countries signed in June 2015. The Obama Administration has “welcomed” Korea’s interest in joining the talks, though United States Trade Representative (USTR) officials also have indicated they will place priority on concluding an agreement with the existing members before agreeing to the entry of any new countries. The current TPP countries approach membership based on consensus and therefore must reach unanimous agreement on South Korea’s entry before Seoul can join. The United States may require some preliminary commitments from Seoul before it agrees to South Korea’s participation in the negotiations—so called “confidence building measures” were required prior to Canada, Japan, and Mexico’s joining the TPP negotiations. U.S. officials have linked support for South Korea’s possible entry into the proposed TPP with South Korea’s willingness and ability to resolve ongoing issues with the implementation of the KORUS FTA, although officials have also noted that many—though not all—of the U.S. complaints regarding KORUS implementation have been resolved.16 Ultimately, Congress must approve implementing legislation if a completed TPP agreement—with or without South Korea—is to apply to the United States. (For more on South Korea-U.S. interaction over the TPP and U.S.-South Korean economic relations, see “Economic Relations,” below.) In March 2015, South Korea announced it was applying to join the Asian Infrastructure Investment Bank (AIIB). The AIIB is a new China-led multilateral development bank consisting of over 50 countries.17 This move was reportedly done over the objections of the Obama 14 The TPP negotiating parties are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. For more on the proposed TPP, see CRS Report R42694, The Trans-Pacific Partnership (TPP) Negotiations and Issues for Congress, coordinated by Ian F. Fergusson. 15 Ministry of Trade, Industry and Energy Press Release 436, “Korea Outlines New Trade Policy Direction,” June 25, 2013. 16 The White House, “Remarks by President Obama at Business Roundtable,” press release, April 26, 2014. In his remarks, President Obama said, “I discussed this [KORUS implementation] with President Park last night. We both agreed that these are issues we can work through together. And given South Korea’s interest in the Trans-Pacific Partnership, fully implementing KORUS also is the single most important step that South Korea can take now to show that it’s prepared to eventually meet the high standards of TPP.” See also United States Trade Representative, “KORUS FTA: Year Three in Deepening Market Integration. Remarks by Assistant U.S. Trade Representative for Japan, Korea, and APEC Affairs Bruce Hirsh at the Fullerton KORUS Event,” March 12, 2015. “Hirsh Hits Positive Note On Korea TPP Candidacy,” Inside U.S. Trade, March 20, 2015. 17 For more on the AIIB, see CRS Report IF10154, Asian Infrastructure Investment Bank, by Martin A. Weiss. c11173008 Congressional Research Service 6 U.S.-South Korea Relations . Administration. The AIIB has generated considerable controversy. Many analysts say it will help Asian countries meet their massive infrastructure investment needs. However, many analysts and policymakers also have raised concerns about the transparency and governance of China-funded development projects and see the AIIB proposal potentially undermining decades of efforts by the United States and others to improve governance and environmental and social standards. Nuclear Energy Cooperation Agreement The United States and the Republic of Korea have concluded negotiations on the text of a new civilian nuclear cooperation agreement, known as a “123 agreement.” Currently, such cooperation is proceeding under an April 2013 deal that extended the existing agreement, which was due to expire, for two years.18 Legislation to authorize the two-year extension was passed unanimously by both the House and Senate and signed into law by President Obama on February 12, 2014 (P.L. 113-81).19 The two governments initialed the text of the agreement in April 2015.20 It is likely they will formally sign the agreement in June. The U.S. interagency process must also prepare nonproliferation and national security assessments before submitting it to Congress. The agreement would need to be transmitted to Congress for review by fall 2015 in order to meet the required 90 days of continuous session before the two-year extension expires. For years, talks between South Korea and the United States were not able to resolve disagreement over how to treat fuel-making technologies in a renewed accord, and therefore the two countries decided to allow for more negotiating time. The two-year extension was considered a temporary solution to avoid any disruption to nuclear trade. Since 2013, the two countries have been negotiating a new agreement, which would be subject to congressional review. An agreement would not require a positive vote of approval from Congress. Therefore, the agreement could enter into force after a 30-day consultation period and a review period of 60 days of continuous session21 unless Congress enacted a joint resolution of disapproval. Congress also has the option of adopting either a joint resolution of approval with (or without) conditions, or stand-alone legislation that could approve or disapprove the agreement. Any congressional efforts to block the agreement would be subject to presidential veto. One point of disagreement in the renewal process has been whether South Korea will press the United States to include a provision that would allow for the reprocessing of its spent fuel. The current U.S.-Korea nuclear cooperation agreement, as with other standard agreements,22 requires 18 “123” refers to Section 123 of the Atomic Energy Act (as amended). Full text of the agreement is available at http://nnsa.energy.gov/sites/default/files/nnsa/inlinefiles/Korea_South_123.pdf. 19 Representative Royce introduced H.R. 2449 (H.Rept. 113-209), which was passed by the House unanimously on September 17. Senate Foreign Relations Committee Chairman Menendez and Ranking Member Corker introduced S. 1901, which was passed by the Senate on January 27, 2014. 20 “China, S.Korea Nuclear Pacts Advance,” Arms Control Today, May 5, 2015. 21 Days on which either House is in a recess of more than three days (pursuant to a concurrent resolution authorizing the recess) do not count toward the total. If Congress adjourns its session sine die, continuity is broken, and the count starts anew when it reconvenes. 22 CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth D. Nikitin. c11173008 Congressional Research Service 7 U.S.-South Korea Relations . U.S. permission before South Korea can reprocess U.S.-origin spent fuel, including spent fuel from South Korea’s U.S.-designed reactors.23 The issue has become a sensitive one for many South Korean officials and politicians, who see it as a matter of national sovereignty. The United States has been reluctant to grant such advance permission due to concerns over the impact on negotiations with North Korea and on the nonproliferation regime overall. Through reprocessing, spent fuel can be used to make reactor fuel or to acquire plutonium for weapons. For many years, the United States and South Korea have worked on joint research and development projects to address spent fuel disposition, including joint research on pyro-processing, a type of spent fuel reprocessing. In October 2010, the two countries began a 10-year, three-part joint research project on pyro-processing that includes joint research and development at Idaho National Laboratory, development of international safeguards for this technology, economic viability studies, and other advanced nuclear research including alternatives to pyro-processing for spent fuel disposal.24 According to press reports, the two sides resolved this issue by including provisions in the renewal agreement text to allow for continuation of the joint research and development of this technology, as well as the creation of a high-level commission which may periodically review fuel cycle policy. (For more on the negotiations and the debate over U.S.-ROK civilian nuclear cooperation, see “Nuclear Energy and Non-Proliferation Cooperation,” below.) State of the Alliance Since 2009, the United States and South Korea have accelerated steps to transform their alliance, broadening it from its primary purpose of defending against a North Korean attack to a regional and even global partnership. South Korea has contributed troops, equipment, and other assistance to international missions such as anti-piracy efforts in the Gulf of Aden, the campaign to combat the spread of Ebola, and reconstruction activities in Afghanistan. Joint statements issued from a series of high-level meetings emphasized the commitment to modernize and expand the alliance while reaffirming the maintenance of current level of 28,500 U.S. troops on the peninsula and the U.S. security guarantee to protect South Korea. Spurred by violent attacks from North Korea in 2010, the alliance partners agreed on a “Counter-Provocation Plan” and then sharpened the agreement by developing a “Tailored Deterrence Strategy against North Korean Nuclear and Other WMD Threats.” A high-level joint statement in October 2014 reaffirmed existing efforts and singled out new cooperative initiatives on cyber, space, and nuclear safety.25 Despite these indicators of strength, the alliance faces a host of challenges in the months and years ahead. The political atmospherics of the alliance have been positive, but the conservative Park and Lee governments have slowed the defense budget increases planned under the earlier, progressive Roh Moo-hyun Administration (2003-2008). The two countries also face disputes related to the realignment of U.S. forces within Korea, a process that Congress has followed closely because of concerns about the cost. As the alliance becomes more balanced, Seoul is wrestling with the tension between developing its own indigenous capabilities and relying on 23 Under the 1978 Nuclear Nonproliferation Act, consent rights apply to material originating in the U.S. or material that has been fabricated into fuel or irradiated in a reactor with U.S. technology. The majority of South Korea’s spent fuel would need U.S. consent before it could be reprocessed. 24 “Discussions on Korea-U.S. Joint Research on Fuel Cycle,” Press Release, Ministry of Education, Science and Technology, Republic of Korea, April 18, 2011; “S. Korea, U.S. Agree to Start Joint Study on Nuclear Fuel Reprocessing,” Yonhap, April 17, 2011. 25 State Department, “Joint Statement of the 2014 United States - Republic of Korea Foreign and Defense Ministers’ Meeting,” October 24, 2014. c11173008 Congressional Research Service 8 U.S.-South Korea Relations . procurement of U.S. weapons systems. Externally, South Korea also faces China’s strong resistance to U.S.-South Korea alliance upgrades, particularly those that extend beyond the Korean Peninsula. The debate in South Korea over ballistic missile defense upgrades is closely tied to these two issues. The United States and South Korea have twice delayed their 2007 agreement to transfer wartime operational control (Opcon) from U.S. to ROK forces. These postponements could be interpreted as a flexible adjustment to changed circumstances on the Korean Peninsula or as emblematic of problems with following through on difficult alliance decisions. Although scheduled to be completed in 2015, the two sides announced in October 2014 that the transfer would occur according to a “conditions-based approach,” likely no sooner than 2020. The planned realignment of all U.S. forces from bases near the de-militarized zone (DMZ) border with North Korea to bases farther south is making progress, but concerns over cost-sharing and configuration of relocated troops remain. (For more on alliance issues, including congressional actions, see “Security Relations and the U.S.-ROK Alliance,” below.) Park Geun-hye’s Political Standing Park’s public approval ratings were in the 60%-70% range for much of 2013, in part due to positive assessments of her handling of foreign affairs, particularly inter-Korean relations. However, by early 2015 her popularity had fallen to near 30% according to some polls. They rose back to the 40%-45% level following her Saenuri Party’s success in several April 2015 byelections before falling following the MERS outbreak in May and June 2015. Sentiments toward Park’s government first dropped sharply following the April 2014 sinking of the Sewol ferry in the waters off the country’s the western coast. The deaths of nearly 300 passengers—mostly high school students—for months cast a pall over South Korea and over the Park government. The tragedy’s political impact has been likened to the political effects of the 2005 Hurricane Katrina disaster in the United States.26 The Park government has been criticized for rescuers’ allegedly slow response to distress calls, and the sinking has prompted South Koreans to ask questions about how well government agencies have enforced safety regulations, which the Sewol was found to have violated, about the relationship between government regulators and the industries they oversee, as well as whether companies put profits ahead of safety. Several of the Sewol’s ownership group and its crew have been convicted of gross negligence, including the captain, who fled the ship without attempting to help the passengers. Park also has been weakened by perceptions that her government has done little to follow through on her campaign pledges to overcome South Korea’s economic difficulties and strengthen its social safety net. Due to personal or political scandals, a series of Park’s appointees—including three successive appointees to be prime minister—withdrew their names before taking office.27 These developments have raised questions about her government’s (and her) competence and willingness to reach outside her inner circle. Most recently, in spring 2015, a new scandal arose for Park’s government when a South Korean businessman, who later committed suicide, stated that he had provided bribes to several former close aides to Park. The then-sitting prime minister 26 Chico Harlan, “After Ferry Disaster, a Katrina-like Reckoning in South Korea,” Washington Post, April 27, 2014. In South Korea’s political system, the President appoints the Prime Minister, who serves as head of the President’s cabinet. 27 c11173008 Congressional Research Service 9 U.S.-South Korea Relations . was implicated in the bribery scandal, and he subsequently resigned after only two months in office. Additionally, the government has struggled against criticism that it mishandled the mounting evidence that the country’s intelligence service tried to influence the 2012 presidential election in her favor (though no evidence has surfaced that Park knew of the matter). (For background, see the “South Korean Politics” section, below.) South Korean Attitudes Toward the United States and the March 2015 Attack Against the U.S. Ambassador At a March 5, 2015, breakfast meeting in Seoul, a South Korean man attacked U.S. Ambassador to South Korea Mark Lippert with a knife, sending the Ambassador to the hospital with deep cuts on his face, fingers, and wrist. Lippert required surgery, including 80 stitches on his face. South Korean authorities arrested the attacker, Kim Ki-jong, a left-wing civic group’s director who has expressed support for pro-North Korean causes and has a history of involvement in anti-U.S. and anti-Japanese protests. The incident led to an outpouring of support for Lippert and the U.S.-South Korea alliance. This is in keeping with the results of opinion polling of South Korean attitudes over the past several years. In a 2014 Pew Research Center survey, over 80% of South Koreans registered a “favorable” opinion of the United States, compared to less than 50% in 2003.28 That said, some displays of support for Lippert by government officials and conservative groups were so effusive that they appear to have made many other South Koreans feel uncomfortable, an indication of the sensitivities of many South Koreans when they feel their leaders are catering too much to U.S. interests. Additionally, some South Koreans have accused the Park government and its conservative base of exploiting the attack to undermine domestic opposition groups and rally support for the U.S.-South Korea alliance.29 Background on U.S.-South Korea Relations Overview While the U.S.-South Korea relationship is highly complex and multifaceted, five factors arguably drive the scope and state of relations between the two allies: • the challenges posed by North Korea, particularly its weapons of mass destruction programs and perceptions in Washington and Seoul of whether the Kim Jong-un regime poses a threat, through its belligerence and/or the risk of its collapse; • the growing desire of South Korean leaders to use the country’s middle power status to play a larger regional and, more recently, global role; 28 Pew Research Center, “Global Indicators Database,” accessed March 3, 2015, and available at http://www.pewglobal.org/database/indicator/1/. South Korea recorded the 4th highest opinions of the United States. 29 See, for instance, Choe Sang-Hun, “South Koreans Divided on Reactions to Knife Attack on U.S. Ambassador Mark Lippert,” New York Times, March 9, 2015; and “Undue Politicizing of Violence on Envoy Could Backfire,” Korea Times, March 8, 2015. c11173008 Congressional Research Service 10 U.S.-South Korea Relations . • China’s rising influence in Northeast Asia, which has become an increasingly integral consideration in many aspects of U.S.-South Korea strategic and economic policymaking; • South Korea’s transformation into one of the world’s leading economies—with a strong export-oriented industrial base—which has led to an expansion in the number and types of trade disputes and helped drive the two countries’ decision to sign a free trade agreement; and • South Korea’s continued democratization, which has raised the importance of public opinion in Seoul’s foreign policy. Additionally, while people-to-people ties generally do not directly affect matters of “high” politics in bilateral relations, the presence of over 1.2 million Korean Americans and the hundreds of thousands of trips taken annually between the two countries has helped cement the two countries together. Some Members of Congress tend be interested in South Korea-related issues because of bilateral cooperation over North Korea, a desire to oversee the management of the U.S.-South Korea alliance, South Korea’s growing importance on various global issues, deep bilateral economic ties, and the interests of many Korean Americans. Large majorities of South Koreans say they value the U.S.-ROK alliance and have positive opinions of the United States. However, many South Koreans are resentful of U.S. influence and chafe when they feel their leaders offer too many concessions to the United States. South Koreans also tend to be wary of being drawn into U.S. policies that antagonize China. Although many of these concerns are widely held in South Korea, they are particularly articulated by Korea’s progressive groups, who have opposed much of Park’s and Lee’s policy agendas and their governing styles. Historical Background The United States and South Korea have been allies since the United States intervened on the Korean Peninsula in 1950 and fought to repel a North Korean takeover of South Korea. Over 33,000 U.S. troops were killed and over 100,000 were wounded during the three-year conflict. On October 1, 1953, a little more than two months after the parties to the conflict signed an armistice agreement, the United States and South Korea signed a Mutual Defense Treaty, which provides that if either party is attacked by a third country, the other party will act to meet the common danger. The United States maintains about 28,500 troops in the ROK to supplement the 650,000strong South Korean armed forces. South Korea deployed troops to support the U.S.-led military campaign in Vietnam. South Korea subsequently has assisted U.S. deployments in other conflicts, most recently by deploying over 3,000 troops to play a non-combat role in Iraq and over 300 noncombat troops to Afghanistan. Beginning in the 1960s, rapid economic growth propelled South Korea into the ranks of the world’s largest industrialized countries. For nearly two decades, South Korea has been one of the United States’ largest trading partners. Economic growth, coupled with South Korea’s transformation in the late 1980s from a dictatorship to a democracy, also has helped transform the ROK into a mid-level regional power that can influence U.S. policy in Northeast Asia, particularly the United States’ approach toward North Korea. c11173008 Congressional Research Service 11 U.S.-South Korea Relations . North Korea in U.S.-ROK Relations North Korea Policy Coordination Dealing with North Korea is the dominant strategic element of the U.S.-South Korean relationship. South Korea’s growing economic, diplomatic, and military power has given Seoul a much more direct and prominent role in Washington’s planning and thinking about how to deal with Pyongyang. One possible indicator of South Korea’s centrality to diplomacy over North Korea is that no successful round of the Six-Party nuclear talks has taken place when interKorean relations have been poor. Since 2009, the United States and South Korea in effect have adopted a joint approach to Pyongyang that has four main components: • keeping the door open to Six-Party Talks over North Korea’s nuclear program but refusing to re-start them without a North Korean assurance that it would take “irreversible steps” to denuclearize;30 • insisting that Six-Party Talks and/or U.S.-North Korean talks must be preceded by North-South Korean talks on denuclearization and improvements in NorthSouth Korean relations; • gradually attempting to alter China’s strategic assessment of North Korea; and • responding to Pyongyang’s provocations by tightening sanctions against North Korean entities and conducting a series of military exercises. The two countries’ approach could be described as a passive-aggressive policy that in effect is focused on containing, rather than rolling back, North Korea’s nuclear activities by gradually increasing international pressure against North Korea. One drawback is that it has allowed Pyongyang to control the day-to-day situation, according to some experts. While Washington and Seoul wait to react to Pyongyang’s moves, the criticism runs, North Korea has continued to develop its nuclear and missile programs and has embarked on a propaganda offensive designed to shape the eventual negotiating agenda to its benefit. Many of Park’s proposed initiatives with North Korea appear designed to rectify these perceived shortcomings. To date, however, North Korea’s general refusal to accept Park’s overtures has not provided her government with an opportunity to apply her policies. The joint U.S.-ROK approach has involved elements of both engagement and pressure. Washington and Seoul have tended to reach out to North Korea during relatively quiescent periods. In contrast, they have tended to emphasize pressure tactics during times of increased tension with North Korea. These periods of tension occurred repeatedly after Lee Myung-bak’s inauguration in February 2008. Most notably, they included North Korean nuclear tests in May 2009 and February 2013; North Korean long-range rocket launches in April 2009, April 2012, and December 2012; the March 2010 sinking of a South Korean naval vessel, the Cheonan; and the November 2010 North Korean artillery attack on the South Korean island of Yeonpyeong-do.31 30 The Six-Party talks were held among China, Japan, North Korea, Russia, South Korea, and the United States between 2003 and 2008. 31 On Yeonpyeong-do, over 150 shells fired by North Korea killed four South Koreans (two Marines and two civilians), wounded dozens, and destroyed or damaged scores of homes and other buildings. All 46 South Korean sailors on the Cheonan died. A multinational team that investigated the sinking, led by South Korea, determined that the ship was sunk by a North Korean submarine. The cause of the Cheonan’s sinking has become highly controversial in South (continued...) c11173008 Congressional Research Service 12 U.S.-South Korea Relations . The latter incident was North Korea’s first direct artillery attack on ROK territory since the 19501953 Korean War and served to harden South Korean attitudes toward North Korea. President Lee reportedly stated that he wanted to order a retaliatory air strike, but the existing rules of engagement—which he subsequently relaxed—and the existence of the U.S.-ROK military alliance restrained him.32 After North Korea’s attack on Yeonpeyong-do, many conservative Koreans criticized as insufficient the Lee government’s military response, which primarily consisted of launching about 80 shells at North Korea and holding large-scale exercises with the United States. Park Geun-hye has made boosting deterrence against North Korea a tenet of her presidency, and has vowed to retaliate if North Korea launches another conventional attack.33 Inter-Korean Relations and Park Geun-Hye’s “Trustpolitik” Park’s statements on North Korea policy include elements of both conciliation and firmness, and she has written that her approach would “entail assuming a tough line against North Korea sometimes and a flexible policy open to negotiations other times.”34 On the one hand, Park has called for creating a “new era” on the Korean Peninsula by building trust between North and South Korea. On the other hand, Park also has long stated that a nuclear North Korea “can never be accepted” and that building trust with Pyongyang will be impossible if it cannot keep the agreements made with South Korea and the international community. Park also has said that South Korea will “no longer tolerate” North Korean military attacks, that they will be met with an “immediate” South Korean response, and that the need for South Korea to punish North Korean military aggression “must be enforced more vigorously than in the past.”35 The first step in Park’s plan has been attempting to deter North Korea’s provocations by strengthening South Korea’s defense capabilities, while simultaneously promoting a range of dialogues and projects with North Korea, generally on a relatively small scale. Among short-term inter-Korean initiatives, she has proposed that the two Koreas resume a regular dialogue process; hold regular reunions for families separated since the Korean War ended in 1953; jointly mark the 70th anniversary of their August 1945 liberation from Japanese colonial rule; take steps to link their rail systems and ports, with an eventual goal of connecting the Korean Peninsula to the Eurasian continent; and launch assistance programs by South Korea to help North Korean pregnant mothers and young children, as well as North Korea’s agricultural sector.36 Most of Park’s inter-Korean cooperation initiatives appear to be calibrated to North Korea’s behavior. For instance, while she generally has de-linked family reunions and some forms of humanitarian assistance from overall political developments, other steps would apparently require bigger changes from North Korea. In particular, Park has affirmed that large-scale assistance is (...continued) Korea. While most conservatives believe that North Korea was responsible for explosion, many who lean to the left have criticized the investigation team as biased or argue that its methodology was flawed. 32 “Lee Recalls Getting Tough with N.Korea,” Chosun Ilbo, February 5, 2013. 33 “Park Vows to Make N. Korea ‘Pay’ If It Attacks S. Korea,” Korea Herald, May 7, 2013. 34 Park Geun-hye, “A New Kind of Korea: Building Trust Between Seoul and Pyongyang,” Foreign Affairs, September/October 2011. 35 Ibid. 36 Joint Press Release by Ministries of Unification, Foreign Affairs, National Defense, and Patriots and Veterans Affairs, “Let’s End the Era of Division and Open Up the Era of Unification,” January 19, 2015; Ministry of Unification Press Release, “2015 MOU Work Plan Presented to the President,” January 19, 2015. c11173008 Congressional Research Service 13 U.S.-South Korea Relations . dependent on progress on denuclearization and North Korea refraining from military provocations. It is not clear how the Park government will resolve the seeming contradiction between policies of toughness and flexibility, particularly if North Korea continues to be relatively unresponsive to her attempts at outreach. A key question will be the extent to which her government will continue to link progress on denuclearization—the United States’ top concern—to other elements of South Korea’s approach toward North Korea. Likewise, an issue for the Obama Administration and Members of Congress is to what extent they will support—or, not oppose—any initiatives by Park to expand inter-Korean relations. Deterrence Issues One factor that may influence U.S.-ROK cooperation on North Korea is Pyongyang’s apparent progress in its missile and nuclear programs. North Korea’s February 2013 nuclear test, for instance, triggered calls in South Korea for the United States to redeploy tactical nuclear weapons in the ROK and for South Korea to develop its own nuclear weapons deterrent. To reassure South Korea and Japan after North Korea’s test, President Obama personally reaffirmed the U.S. security guarantee of both countries, including extended deterrence under the United States’ socalled “nuclear umbrella.” In early March 2013, Park stated that “provocations by the North will be met by stronger counter-responses,” and the chief operations officer at South Korea’s Office of the Joint Chiefs of Staff was widely quoted as saying that if South Korea is attacked, it will “forcefully and decisively strike not only the origin of provocation and its supporting forces but also its command leadership.”37 South Korean defense officials later clarified that “command leadership” referred to mid-level military commanders who direct violent attacks and not North Korean political leaders such as Kim Jong-un. Since North Korea’s 2010 shelling of Yeonpyeong Island, South Korean leaders have shown a greater willingness to countenance the use of force against North Korea. The Lee government pushed the alliance to develop a new “proactive deterrence” approach that calls for a more flexible posture to respond to future attacks, as opposed to the “total war” scenario that drove much of USFK defense planning in the past. For instance, Lee pushed the United States to relax restrictions on South Korean ballistic missiles and relaxed the rules of engagement to allow frontline commanders greater freedom to respond to a North Korean attack without first asking permission from the military chain of command.38 Such changes have made some analysts and planners more concerned about the possibility that a small-scale North Korean provocation could escalate. U.S. defense officials insist that the exceedingly close day-to-day coordination in the alliance ensures that U.S.-ROK communication would be strong in the event of a new contingency. The 2013 “Counter-Provocation Plan” was developed to adapt both to the new threats envisioned from North Korea and to the South Korean government’s new attitudes about retaliation. 37 Blue House, “Park Geun-hye 2013 March 1st Speech,” March 1, 2013; Choe Sang-Hun, “South Korea Pushes Back on North’s Threats,” NYTimes.com, March 6, 2013. 38 “Lee Recalls Getting Tough with N.Korea,” Chosun Ilbo, February 5, 2013. c11173008 Congressional Research Service 14 U.S.-South Korea Relations . Security Relations and the U.S.-ROK Alliance The United States and South Korea are allies under the 1953 Mutual Defense Treaty. Under the agreement, U.S. military personnel have maintained a continuous presence on the Korean Peninsula and are committed to help South Korea defend itself, particularly against any aggression from the North. The United States maintains about 28,500 troops in the ROK. In 2007 and 2008, U.S. commanders in South Korea stated that the future U.S. role in the defense of South Korea would be mainly an air force and naval role. The ROK armed forces today total around 650,000 troops, with about 520,000 of them in the Army and around 65,000 each in the Air Force and Navy. Since 2004, the U.S. Air Force has increased its strength in South Korea through the regular rotation into South Korea of advanced strike aircraft. These rotations are not a permanent presence, but the aircraft often remain in South Korea for weeks and sometimes months for training. South Korea is included under the U.S. “nuclear umbrella,” also known as “extended deterrence,” which applies to other non-nuclear U.S. allies as well. A bilateral understanding between Washington and Seoul gives U.S. forces the “strategic flexibility” to respond to contingencies outside the peninsula, but under the condition that South Korea would have to consent to their deployment in an East Asian conflict. In the past, issues surrounding U.S. troop deployments have been a flashpoint for public disapproval of the military alliance, led by progressive political groups. But in recent years public support for the alliance has become broader and more resilient in responding to incidents involving U.S. bases and soldiers in South Korea. Despite the strengths of the alliance, tensions periodically arise in the partnership. Some of these involve typical alliance conflicts over burden sharing and cost overruns of ongoing realignment initiatives. Others reflect sensitive sovereignty issues involving Seoul’s control over its own military forces and desire to develop its own defense industry without dependence on American equipment. And although the United States and South Korea share a common interest in repelling any North Korea attack, views on the overall security landscape in Northeast Asia differ. Seoul resists adopting positions that threaten or offend China, and often expresses misgivings about Japan’s efforts to expand its military capabilities. Upgrades to the Alliance As mentioned above, since 2009, the two sides have accelerated steps to transform the U.S.-ROK alliance, broadening it from its primary purpose of defending against a North Korean attack to a regional and even global partnership. At the same time, deadly provocations from North Korea have propelled more integrated bilateral planning for responding to possible contingencies. In 2011, the allies adopted a “proactive deterrence” policy to respond swiftly and forcefully to further provocations. Increasingly advanced joint military exercises have reinforced the enhanced defense partnership. In March 2013, U.S. officials disclosed that U.S. B-52 and B-2 bombers participated in exercises held in South Korea, following a period of unusually hostile rhetoric from Pyongyang.39 The number and pace of high-level meetings have also increased. Since holding their first ever so-called “2+2” meeting between the U.S. Secretaries of State and Defense and their South Korean counterparts in 2010, the two sides have held two more 2+2s with an 39 Jay Solomon, Julian Barnes, and Alastair Gale, “North Korea Warned—U.S. Flies Stealth Bombers over Peninsula in Show of Might,” Wall Street Journal, March 29, 2013. c11173008 Congressional Research Service 15 U.S.-South Korea Relations . ever-expanding agenda of cooperative initiatives that includes issues far beyond shared interests on the Korean Peninsula. These areas include cyber security, space, missile defense, nuclear safety, climate change, Ebola, and multiple issues in the Middle East. Since 2011, the Korea-U.S. Integrated Defense Dialogue (KIDD) has held biannual meetings at the Deputy Minister level to serve as the umbrella framework for multiple U.S.-ROK bilateral initiatives. Ballistic Missile Defense and Potential THAAD Deployment As the threat of North Korean ballistic missiles has appeared to intensify in recent years, the United States and South Korea have examined how to improve their BMD capabilities to defend South Korea and U.S. forces stationed there. The United States has urged South Korea to develop advanced BMD capabilities and to integrate them with U.S. and allied BMD systems in the region. The Vice Chairman of the U.S. Joint Chiefs of Staff stated that a regional missile defense system would be more effective against North Korean missile launches and would share the burden of defense among allies.40 However, Washington and Seoul have settled on a policy of interoperability rather than integration, at least for the short-term. Seoul has been resistant to the concept of an integrated BMD system for several reasons: the desire, especially strong among progressive Koreans, for more strategic autonomy; a reluctance to irritate China, which has consistently voiced opposition to U.S. BMD deployments; and a disinclination to cooperate with Japan due to poor relations based on disputes over historical and territorial issues. South Korea is developing its own system, called Korea Air and Missile Defense (KAMD), which could be compared to the U.S.-produced PAC-2—a second-generation Patriot air defense system. KAMD will be interoperable with alliance systems and aims to gradually incorporate more advanced BMD equipment as those elements are procured. The ROK Navy has three destroyers with Aegis tracking software but no missile interceptors, and the ROK Army fields PAC-2 interceptors. The South Korean military will reportedly purchase U.S. equipment, such as PAC-3 interceptors, SM-2 surface-to-air missiles, and the more advanced SM-6 air defenses starting in 2016. South Korea has also placed a heavy emphasis on indigenous development of hightechnology defense systems and may seek to produce its own BMD equipment. The potential deployment of one particular BMD system called the Theater High-Altitude Area Defense (THAAD) system has been controversial in South Korea. Reportedly, the U.S. military is considering a deployment of a THAAD battery to South Korea to help defend against North Korean ballistic missiles.41 China has complained that the radar capabilities of the THAAD system could be configured to allow the United States to monitor airspace deep into Chinese territory, and in February 2015 the Chinese Minister of Defense lodged a protest with his counterpart in Seoul.42 Nevertheless, the South Korean Minister of National Defense has praised a potential U.S. deployment of THAAD, saying it “will be helpful in ... strengthening the security posture on the peninsula.”43 In one sense, the proposed THAAD deployment has become a litmus test for Seoul’s straddling the gap between Beijing and Washington. Yet, South Korea has other concerns surrounding this issue, such as the affordability of buying its own THAAD system from 40 Paul McLeary, “Burden Sharing is the Future of Asian Missile Defense, Pentagon Official Says,” Defense News, May 28, 2014. 41 Daniel Pinkston, “No Such Thing as a Free Ride? ROK Missile Defence, Regional Missile Defence and OPCON Transfer,” International Crisis Group, In Pursuit of Peace blog, July 29, 2014. 42 Ser Myo-ja, “China’s Defense Chief Raises THAAD,” Korea JoongAng Daily, February 5, 2015. 43 Sarah Kim, “Korea Coming Around to THAAD Idea,” Korea JoongAng Daily, July 22, 2014. c11173008 Congressional Research Service 16 U.S.-South Korea Relations . the United States, the effectiveness of THAAD against North Korean missiles, and the timeframe when a THAAD system could become available for South Korea.44 U.S. Alliance and ROK Defense Reform Plans Current security developments are taking place in the context of several concurrent defense plans. The June 2009 Obama-Lee summit produced the “Joint Vision for the Alliance,” which promised to enhance and globalize future defense cooperation. After the first decision to delay the transfer of wartime operational control (Opcon) from U.S. to ROK forces, the operational “Strategic Alliance 2015” roadmap (announced in September 2010) outlined the new Opcon transition (since delayed until an unspecified date), including a path forward for improvements in ROK capabilities and changes to U.S. troop relocation. The U.S. military is also undergoing a broad transformation of its forces in the region; the 8th Army is moving toward becoming a war fighting headquarters that can deploy to other areas of the world while still serving as a deterrent to any possible aggression from North Korea.45 Meanwhile, South Korea’s Defense Reform 2020 bill passed by the National Assembly in 2006 laid out a 15-year, 621 trillion won (about $550 million) investment that aimed to reduce the number of ROK troops while developing a high-tech force and strengthening the Joint Chiefs of Staff system. The defense reforms announced by the Park Administration in March 2014 aim to restructure the ground operations command, which will allow the South Korean military to conduct nimbler operations in response to low-intensity provocations.46 The reforms also plan to raise the pay of Korean military personnel while reducing the size of the force from the current 655,000 servicemembers to 522,000 by 2022. Despite these changes, the conservative Lee and Park Administrations have slowed significantly the defense budget increases planned under the earlier, progressive Roh Moo-hyun Administration (2003-2008). The Relocation of U.S. Forces Korea (USFK) The planned realignment of all U.S. forces from bases near the de-militarized zone (DMZ) border with North Korea to bases farther south is progressing after initial delays, but challenges with USFK force posture remain. In 2004, Secretary of Defense Donald Rumsfeld authorized a realignment program to reduce and relocate U.S. forces in South Korea. Under the Rumsfeld program, the Pentagon withdrew a 3,600-person combat brigade from the Second Division and sent it to Iraq. The Rumsfeld plan called for the U.S. troop level in South Korea to fall from 37,000 to 25,000 by September 2008. However, in 2008, Secretary of Defense Bob Gates halted the withdrawals at the level of 28,500. The realignment plan reflects the shift toward a supporting role for USFK and a desire to resolve the issues arising from the location of the large U.S. Yongsan base in downtown Seoul. The USFK base relocation plan has two elements. The first involves the transfer of a large percentage of the 9,000 U.S. military personnel at the Yongsan base to U.S. Army Garrison (USAG) Humphreys, which is located near the city of Pyeongtaek some 40 miles south of Seoul. The second element involves the relocation of about 10,000 troops of the Second Infantry 44 Rob York, “Why Seoul Shrugs at U.S.-Led Missile Defense,” NK News, August 29, 2014. “U.S. Army in South Korea Begins Transformation of Forces,” Stars and Stripes. August 25, 2010. 46 Song Sang-ho, “Frontline Corps to Get Greater Command Role,” Korea Herald, March 6, 2014. 45 c11173008 Congressional Research Service 17 U.S.-South Korea Relations . Division from the demilitarized zone to areas south of the Han River (which runs through Seoul). The end result would be that USFK sites will decline to 48, from 104 in 2002. The bulk of U.S. forces will be clustered in the two primary “hubs” of Osan Air Base/USAG Humphreys and USAG Daegu that contain five “enduring sites” (Osan Air Base, USAG Humphreys, USAG Daegu, Chinhae Naval Base, and Kunsan Air Base). U.S. counter-fires (counter-artillery) forces stationed near the DMZ are the exception to this overall relocation. The United States and South Korea agreed that those U.S. units would not relocate to USAG Humphreys until the South Korean counter-fires reinforcement plan is completed around the year 2020.47 The city of Dongducheon, where those soldiers are based, has protested this decision and withdrawn some cooperation with the U.S. Army.48 The relocations to Pyeongtaek originally were scheduled for completion in 2008, but have been postponed several times because of the slow construction of new facilities at Pyeongtaek and South Korean protests of financial difficulties in paying the ROK share of the relocation costs. The commander of the U.S. Army Corps of Engineers assessed that the entire troop realignment was 42% complete as of May 2014 and was on track to finish in 2017.49 The original cost estimate was over $10 billion; South Korea was to contribute $4 billion of this. Estimates in 2010 placed the overall costs at over $13 billion. In congressional testimony in September 2010, U.S. officials demurred from providing a final figure on the cost of the move, but confirmed that South Korea would pay more than the original $4 billion.50 U.S. Ambassador Mark Lippert testified to Congress in June 2014 that the Humphreys Housing Opportunity Program (privately developed housing for servicemembers and their families inside the base) was a “challenging issue” and that the Defense Department was re-examining housing plans at USAG Humphreys.51 In summer 2013, USFK broke ground for the new headquarters of the U.S.-Korea Command (KORCOM) and United Nations Command (UNC) in Pyeongtaek. The facility is to become the command center for U.S. forces after the planned transfer of wartime operational control. 47 “Joint Communique of the 46th ROK-U.S. Security Consultative Meeting,” U.S. Department of Defense, Washington, DC, October 23, 2014. 48 Jun Ji-hye, “City Protests US Troop Presence,” Korea Times, January 13, 2015. 49 Lee Chi-dong, “USFK Base Relocation Project on Track, but Some Details Still Being Discussed: Commander,” Yonhap News Agency, May 23, 2014. 50 “Senate Armed Services Committee Holds Hearing on Security Situation on the Korean Peninsula,” CQ Congressional Transcripts. September 16, 2010. 51 U.S. Congress, Senate Committee on Foreign Relations, Senate Foreign Relations Committee Holds Confirmation Hearing on Various Ambassadorial and U.S. Agency for International Development Nominations, 113th Cong., 2nd sess., June 17, 2014. c11173008 Congressional Research Service 18 U.S.-South Korea Relations . Figure 2. USFK Bases After Realignment Plan Is Implemented Source: Jane’s Sentinel Security Assessment—China and Northeast Asia, date posted April 15, 2010. Tour Normalization Another complicating factor in the development of the Yongsan Relocation Plan is the announcement by the Pentagon in 2008 that U.S. military families, for the first time, would be allowed to join U.S. military personnel in South Korea. Most U.S. troops in South Korea serve one-year unaccompanied assignments. The goal was to phase out one-year unaccompanied tours in South Korea, replacing them with 36-month accompanied or 24-month unaccompanied tours. Supporters of the plan argued that accompanied tours create a more stable force because of longer, more comfortable tours. If implemented, the “normalization” of tours would increase the size of the U.S. military community at Osan/Humphries near Pyeongtaek to over 50,000. In 2011, some Members of Congress raised strong concerns about existing plans to relocate U.S. bases in South Korea and normalize the tours of U.S. troops there. In May 2011, Senators Carl Levin, John McCain, and James Webb issued a statement that urged a reconsideration of the existing plans for U.S. military presence in the Asia Pacific, including the current agreements in South Korea. A Government Accountability Office (GAO) report released in May 2011 concluded that the Department of Defense had neither demonstrated a “business case” to justify the tour normalization initiative, nor considered alternatives.52 In June 2011, the Senate Armed Services Committee passed amendments to the FY2012 National Defense Authorization Act that prevents the obligation of any funds for tour normalization until further reviews of the plan are considered and a complete plan is provided to Congress. The National Defense Authorization Act for Fiscal Year 2013 (H.R. 4310/P.L. 112-239) includes a provision (Section 2107) that continues to prohibit funds for tour normalization. Proponents of the existing plans say that such changes could restrict U.S. military capabilities and readiness as well as jeopardize hard-fought agreements designed to make the U.S. military presence more politically sustainable in South Korea.53 52 Report found at http://www.gao.gov/products/GAO-11-316. Bruce Klingner, “Proposed Re-Realignment for Northeast Asia Ignores Strategic Realities,” Heritage Foundation (continued...) 53 c11173008 Congressional Research Service 19 U.S.-South Korea Relations . For the time being, at least, the Department of Defense (DOD) has “stopped pursuing Tour Normalization as an initiative for Korea.”54 In January 2013, USFK released a statement saying, “while improvements to readiness remain the command’s first priority, tour normalization is not affordable at this time.”55 An April 2013 Senate Armed Services Committee (SASC) report criticized the policy change as expensive and questioned the legality of how DOD calculated the housing allowance.56 Cost Sharing Since 1991, South Korea has provided financial support through a series of Special Measures Agreements (SMAs) to offset the cost of stationing U.S. forces in Korea. In January 2014, Seoul and Washington agreed to terms for the next five-year SMA, covering 2014-2018. Under the new agreement, Seoul will raise its contribution by 6% to 920 billion Korean won ($867 million) in 2014 and then increase its annual payments at the rate of inflation. The new SMA also makes U.S. use of South Korean funds more transparent than in the past, in response to South Korean criticism. The ROK Ministry of Defense must approve every contract for which SMA funds are obligated, and USFK is to submit an annual report on the SMA funds to the National Assembly. Even with these changes, Korean opposition lawmakers complained that the agreement is “humiliating” and that USFK might use SMA funds to finance portions of the relocation plan (see above) in violation of the 2004 agreement. According to the aforementioned SASC report, U.S. military non-personnel costs in South Korea totaled about $1.1 billion in 2012, and Korean SMA payments totaled 836 billion won ($765 million). In combination with that sum, other compensation outside the SMA (such as the South Korea contribution to base relocation) provides for about 40%-45% of the total non-personnel stationing costs for the U.S. troop presence.57 South Korean SMA payments have not kept pace with rising U.S. costs. The 2013 SASC report says that between 2008 and 2012 South Korea’s contributions grew by about $42 million (in line with the pace of inflation), while U.S. nonpersonnel costs increased by more than $500 million. Opcon Transfer The United States has agreed to turn over the wartime command of Korean troops to South Korea, but the two sides have postponed this transfer for several years. Under the current command arrangement, which is a legacy of U.S. leadership of the U.N. coalition in the 19501953 Korean War, South Korean soldiers would be under the command of U.S. forces if there were a war on the peninsula. The plan to transfer wartime operational control recognizes South (...continued) WebMemo #3262, May 18, 2011. 54 U.S. Congress, Senate Committee on Armed Services, Advance Questions for Lieutenant General Curtis Scaparrotti, USA, Nominee to be Commander, United Nations Command/Combined Forces Command/United States Forces Korea, 113th Cong., 1st sess., July 30, 2013. 55 Ashley Rowland, “USFK: Program to Move Families to Korea ‘Not Affordable at This Time,’” Stars and Stripes, January 8, 2013. 56 U.S. Congress, Senate Committee on Armed Services, Inquiry into U.S. Costs and Allied Contributions to Support the U.S. Military Presence Overseas, 113th Cong., April 15, 2013, S.Rept. 113-12 (Washington: GPO, 2013). 57 Figures provided by officials in Special Measures Agreement program at U.S. Forces Korea through e-mail correspondence with CRS. c11173008 Congressional Research Service 20 U.S.-South Korea Relations . Korea’s advances in economic and military strength since the Korean War and is seen by many Koreans as important for South Korean sovereignty. Under a 2007 agreement, the U.S.-ROK Combined Forces Command (CFC), which has been headed by the U.S. commander in Korea, is to be replaced with separate U.S. and ROK military commands; the provisional name of the new U.S. command is Korea Command (KORCOM). When the U.S. and ROK militaries operate as a combined force under the new command structure, U.S. forces may be under the operational command of a Korean general officer, but U.S. general officers are to be in charge of U.S. subcomponents.58 A bilateral Military Cooperation Center would be responsible for planning military operations, military exercises, logistics support, and intelligence exchanges, and assisting in the operation of the communication, command, control, and computer systems. It is unclear what role the U.N. Command, which the USFK Commander also holds, will have in the future arrangement. In 2010, the Opcon transfer was postponed to 2015 after a series of provocations from North Korea and amid concerns about whether South Korean forces were adequately prepared to assume responsibility. As the new deadline of 2015 grew closer, concerns again emerged about the timing. Reportedly, South Korean officials worried that their military was not fully prepared to cope with North Korean threats and that Pyongyang might interpret the Opcon transfer as a weakening of the alliance’s deterrence.59 Some military experts expressed concern that turning over control would lead to the United States reducing its overall commitment to South Korean security.60 In October 2014, the United States and South Korea announced in a joint statement that the allies would take a “conditions-based approach” to the Opcon transfer and determine the appropriate timing based on South Korean military capabilities and the security environment on the Korean Peninsula.61 The decisions to delay the Opcon transfer could be interpreted as a flexible adjustment to changed circumstances on the Korean Peninsula or as emblematic of problems with following through on difficult alliance decisions. In testimony to Congress in April 2015, USFK Commander General Curtis Scaparrotti explained the three general conditions for Opcon transfer: 62 • South Korea must develop the command and control capacity to lead a combined and multinational force in high-intensity conflict, • South Korea must improve its capabilities to respond to the growing nuclear and missile threat in North Korea, and • The Opcon transition should take place at a time that is conducive to a transition. Scaparrotti stated that main areas of attention for improving South Korea’s capabilities will be C4 (command, control, computers, and communication systems), BMD, munitions, and ISR 58 General Curtis Scaparrotti U.S. Department of Defense Press Briefing, Washington, DC, October 24, 2014. Song Sang-ho, “Allies Rack Brains over OPCON Transfer,” Korea Herald, May 6, 2014. 60 Lee Chi-dong and Roh Hyo-dong, “OPCON Transfer May Usher in Withdrawal of U.S. Troops from Korea: ExGeneral,” Yonhap News Agency, November 18, 2013. 61 “Joint Communique of the 46th ROK-U.S. Security Consultative Meeting,” U.S. Department of Defense, Washington, DC, October 23, 2014. 62 U.S. Congress, House Committee on Armed Services, Hearing on the Risk of Losing Military Technology Superiority and its Implications for U.S. Policy, Strategy, and Posture in the Asia-Pacific, 114th Cong., 1st sess., April 15, 2015. 59 c11173008 Congressional Research Service 21 U.S.-South Korea Relations . (intelligence, surveillance, and reconnaissance) assets. Reportedly, the Opcon transfer may not occur until 2020 or later.63 South Korean Defense Industry and Purchases of U.S. Weapon Systems South Korea is a major purchaser of U.S. weapon systems and is regularly among the top customers for Foreign Military Sales (FMS). Although South Korea generally buys the majority of its weapons from the United States, European and Israeli defense companies also compete for contracts; Korea is an attractive market because of its rising defense expenditures. According to Foreign Policy, however, U.S. officials are concerned that South Korea is exploiting U.S. defense technology in its indigenously produced equipment, some of which is exported to other countries.64 South Korea will purchase the Lockheed Martin F-35 Joint Strike Fighter to be its next main fighter aircraft, after the Ministry of Defense in September 2013 threw out the yearlong acquisition process that selected the Boeing F-15SE fighter.65 The cost of the F-35 had been too high for the original bid, according to reports, but Korean defense officials determined that only the F-35 met their requirements for advanced stealth capability. South Korea will purchase 40 F35 fighters at a total cost of $7.83 billion, with the first delivery of aircraft scheduled for 2018.66 South Korea will also purchase four RQ-4 “Global Hawk” unmanned aerial vehicles (UAVs) at a price of $657 million in total.67 Given concerns that the sale could violate the Missile Technology Control Regime (MTCR) and non-proliferation norms, observers have called on the Obama Administration to ensure that the Global Hawks are used strictly for reconnaissance and are not armed.68 Currently, the South Korean military only operates reconnaissance UAVs, but the Ministry of National Defense budgeted $447 million to indigenously develop a combat UAV by 2021.69 Korea’s Defense Reform 2020 legislation emphasizes the development of indigenous capabilities by increasing the percentage of funds allocated to defense research and development (R&D).70 South Korea aims to improve the competitiveness of its defense industry, but problems with the reliability of certain systems pose a challenge; South Korean firms compete internationally in the armored vehicle, shipbuilding, and aerospace industries.71 Of particular note is the T-50 Golden Eagle, a trainer and light fighter aircraft developed jointly by Lockheed Martin and Korea Aerospace Industries. 63 Park Byong-su, “OPCON Transfer Delayed Again, This Time to Early-2020s Target Date,” Hankyoreh, September 17, 2014. 64 Gordon Lubold, “Is South Korea Stealing U.S. Military Secrets?” Foreign Policy, October 23, 2013, http://www.foreignpolicy.com/articles/2013/10/28/is_south_korea_stealing_us_military_secrets. 65 Ser Myo-ja, “Military Selects Lockheed Martin Fighter,” Korea JoongAng Daily, November 23, 2013. 66 “Military Selects Lockheed Martin Fighter,” JoongAng Ilbo, November 25, 2013. 67 Seth Robson, “US Approves Sale of Global Hawks to South Korea,” Stars and Stripes, December 17, 2014. 68 “Drones for South Korea,” New York Times, Editorial. December 29, 2012. 69 Song Sang-ho, “U.S. Agrees to Extend Seoul’s Ballistic Missile Range: Reports,” Korea Herald, September 23, 2012. 70 “South Korea Defense Budget,” Jane’s Defence Budgets. December 14, 2009. 71 Simon Mundy, “South Korea Aims to Become Defence Powerhouse,” Financial Times, November 6, 2013. c11173008 Congressional Research Service 22 U.S.-South Korea Relations . The 110th Congress passed legislation that upgraded South Korea’s status as an arms purchaser from a Major Non-NATO Ally to the NATO Plus Three category (P.L. 110-429), which has become NATO Plus Five. This upgrade establishes a higher dollar threshold for the requirement that the U.S. executive branch notify Congress of pending arms sales to South Korea, from $14 million to $25 million. Congress has 15 days to consider the sale and take legislative steps to block the sale compared to 30 days for Major Non-NATO Allies. South Korea’s Regional Relations Looking at their surrounding neighborhood, South Koreans sometimes refer to their country as a “shrimp among whales.” South Korea’s relations with China and Japan, especially the latter, combine interdependence and rivalry. Until 2013, trilateral cooperation among the three capitals generally had been increasing, particularly in the aftermath of the 2008 global financial crisis. Between 2009 and 2012, leaders of the three countries met annually in standalone summits, established a trilateral secretariat in Seoul, signed an investment agreement, and laid the groundwork for trilateral FTA negotiations to begin.72 In 2013, however, tensions between South Korea and Japan, and between China and Japan, froze much of this burgeoning trilateral cooperation. One exception was the trilateral FTA negotiations, which were launched in November 2012 and have continued through mid-2015. The three countries’ foreign ministers met in March 2015 for the first time in nearly three years, but as of early July 2015 the three countries have yet to hold a trilateral leaders’ meeting. Park Geun-hye often speaks of a Northeast Asian “paradox,” in which there is a “disconnect between growing economic interdependence on the one hand and backward political-security cooperation on the other.” To resolve this situation, Park has proposed a “Northeast Asian Peace and Cooperation Initiative” to build trust among Northeast Asian countries and alleviate security problems through cooperation on non-traditional security issues, such as nuclear safety and the environment. Critics contend that NAPCI has yet to produce concrete results or define its objectives clearly. South Korea-Japan Relations U.S. policy makers have long encouraged enhanced South Korea-Japan relations. A cooperative relationship between the two countries, both U.S. treaty allies, and among the three is in U.S. interests because it arguably enhances regional stability, helps coordination over North Korea policy, and boosts each country’s ability to deal with the strategic challenges posed by China’s rise. However, despite increased cooperation, closeness, and interdependence between the South Korean and Japanese governments, people, and businesses over the past decade, mistrust on historical and territorial issues continues to linger. South Korea and Japan have competing claims to the small Dokdo/Takeshima islands in the Sea of Japan (called the East Sea by Koreans), and most South Koreans complain that Japan has not adequately acknowledged its history of aggression against Korea.73 For more than three generations beginning in the late 19th century, Japan intervened directly in Korean affairs, culminating in the annexation of the Korean 72 From 1999 to 2007, trilateral summits were only held on the sidelines of the Association of Southeast Asian Nations’ “Plus Three” summit (which included the 10 ASEAN countries plus China, Japan, and South Korea). 73 Since the early 1950s, South Korea has administered Dokdo/Takeshima, which the U.S. government officially calls the “Liancourt Rocks.” c11173008 Congressional Research Service 23 U.S.-South Korea Relations . peninsula in 1910. Over the next 35 years, Imperial Japan all but attempted to wipe out Korean culture.74 Among the victims were tens of thousands75 of South Korean “comfort women” who during the 1930s and 1940s were recruited, many if not most by coercive measures, into providing sexual services for Japanese soldiers. Whenever South Koreans perceive that Japanese officials are downplaying or denying this history, it becomes difficult for South Korean leaders to back initiatives to institutionalize improvements in bilateral ties. “Comfort Women”-Related Legislation The U.S. House of Representatives has taken an interest in the comfort women issue. In the 109th Congress, H.Res. 759 was passed by the House International Relations Committee on September 13, 2006, but was not voted on by the full House. In the 110th Congress, H.Res. 121, with 167 co-sponsors, was passed in the House on July 30, 2007, by voice vote. This resolution expresses the sense of the House that Japan should “formally acknowledge, apologize, and accept historical responsibility in a clear and unequivocal manner” for its abuses of the comfort women. The text of the resolution calls the system “unprecedented in its cruelty” and “one of the largest cases of human trafficking in the 20th century,” asserts that some Japanese textbooks attempt to downplay this and other war crimes, and states that some Japanese officials have tried to dilute the Kono Statement. In the 113th Congress, the 2014 Consolidated Appropriations Act (P.L. 113-76, H.R. 3547) indirectly referred to this resolution. P.L. 113-76’s conference committee issued a Joint Explanatory Statement that called on Federal Agencies to implement directives contained in the July 2013 H.Rept. 113-185, which in turn “urge[d] the Secretary of State to encourage the Government of Japan to address the issues raised” in H.Res. 121. From 2008 to 2011, former President Lee Myung-bak sought to separate historical issues from the larger relationship. In this, he was aided by Japanese leaders from the then-ruling Democratic Party of Japan (DPJ) who often tended to be more willing to acknowledge Imperial Japan’s actions against Korea and who placed a priority on improving relations with Seoul. Cemented for the first time in years by a common strategic outlook on North Korea, trilateral South Korea-U.S.Japan coordination over North Korea policy was particularly close. People-to-people ties blossomed, with tens of thousands of Japanese and Koreans traveling to the other country every day. The South Korean and Japanese militaries also stepped up their cooperation, including holding trilateral exercises with the United States. However, South Koreans’ interest in forming significant new institutional arrangements with Japan is dampened by three domestic factors in South Korea. First, continued suspicions of Japan among the South Korean population place political limitations on how far and how fast Korean leaders can improve relations. Second, continued disagreements over Dokdo/Takeshima’s sovereignty continue to weigh down the relationship. Third, unlike Japan, South Korea generally does not view China as an existential challenge and territorial threat. South Korea also needs Chinese cooperation on North Korea. Accordingly, South Korean leaders tend to be much more wary of taking steps that will alarm China. A factor that could change this calculation is if China is seen as enabling North Korean aggression. Indeed, North Korean acts of provocation are often followed by breakthroughs in ROK-Japan relations, as well as in ROK-U.S.-Japan cooperation. All three of these factors contributed to a dramatic downturn in South Korea-Japan relations in 2012. In May and again in June, the two sides were on the verge of signing a completed intelligence-sharing agreement long sought by the United States as a way to ease trilateral 74 Many Koreans believe that the United States was complicit in this history, by reportedly informally agreeing in a 1905 meeting between U.S. Secretary of War William Taft and Japanese Prime Minister Taro Katsura that the United States would recognize Japan’s sphere of influence over Korea in return for Japan doing the same for the United States in the Philippines. 75 According to some Japanese sources, the number of South Korean comfort women was much lower. c11173008 Congressional Research Service 24 U.S.-South Korea Relations . cooperation and dialogue. However, a firestorm of criticism against the pact in South Korea led the Lee government to cancel the signing minutes before it was to take place. Negotiations over a related deal on exchanging military supplies also broke down. Later that summer, President Lee made the first-ever visit by a South Korean president to Dokdo/Takeshima. Lee said his visit was in large measure a response to what he claimed was Japan’s failure to adequately acknowledge and address the suffering of the World War II comfort women. Relations worsened after the elections of Park Geun-hye and Abe Shinzo. South Korean leaders have objected to a series of statements and actions by Abe and his Cabinet officials that many have interpreted as denying or even glorifying Imperial Japan’s aggression in the early 20th century. Seoul has maintained that it would have difficulty holding a summit unless Japan adopts a “correct understanding” of history. Japanese officials counter that their South Korean counterparts rarely acknowledge the efforts Japan has made to apologize for and address Imperial Japan’s actions. South Korean attitudes toward Abe degraded after his December 2013 visit to the Yasukuni Shrine, a Shinto shrine established to “enshrine” the “souls” of Japanese soldiers who died during war, but that also includes 14 individuals who were convicted as Class A war criminals after World War II. Relations deteriorated further in 2014 when the Abe government released a study that examined the “Kono Statement,” a 1993 apology by then-Chief Cabinet Secretary Yohei Kono that acknowledged the Japanese military’s role in coercing women into the brothel system. The panel that conducted the study, carried out in response to a request by a Diet member of a far-right opposition party, concluded that the statement had been crafted in consultation with Seoul, implying that the document was not based solely on historical evidence. The Abe government has pledged that it stands by the Kono Statement, but critics claim that the study discredits the apology and gives further proof of Tokyo’s (and specifically Abe’s) revisionist aims. South Korea’s Foreign Ministry called the study “meaningless and unnecessary.” Neither Park nor Abe appears willing to be seen as compromising with the other. Moreover, the approaches of both leaders to historical issues appear to contradict one another and are locked in a vicious circle: Park seeks to bring Japan to a more full-throated acknowledgement and apology for its pre-WWII actions, and until 2015 appeared to link other aspects of South Korea-Japan relations to the history issue. Meanwhile, Abe aims to restore Japanese pride in its history by erasing many signs of what many Japanese nationalists have regarded as self-flagellation, such as the portrayal of the early 20th century in history textbooks. Given the array of domestic forces opposed to raising South Korea-Japan relations to a new level, even if the two leaders hold a formal summit, it is unclear whether the two governments will have the interest or capacity to do more than maintain ad hoc cooperation, such as in response to aggressive North Korean actions. South Korea-China Relations China’s rise influences virtually all aspects of South Korean foreign and economic policy. North Korea’s growing economic and diplomatic dependence on China since the early 2000s has meant that South Korea must increasingly factor Beijing’s actions and intentions into its North Korea policy. China’s influence over North Korea has tended to manifest itself in two ways in Seoul. On the one hand, most South Korean officials worry that North Korea, particularly its northern provinces, is drifting into China’s orbit. For those on the political left in South Korea, this was an argument against Lee’s harder line stance toward inter-Korean relations, which they say has eroded much of South Korea’s influence over North Korea. c11173008 Congressional Research Service 25 U.S.-South Korea Relations . On the other hand, China’s continued support for North Korea, particularly its perceived backing of Pyongyang after the Yeonpyeong Island shelling in 2010, has angered many South Koreans, particularly conservatives. China’s treatment of North Korean refugees, many of whom are forcibly repatriated to North Korea, has also become a bilateral irritant. Many South Korean conservatives also express concern that the Chinese have been unwilling to discuss plans for dealing with various contingencies involving instability in North Korea, though beginning in 2013 there were signs that Beijing had become more willing to engage in these discussions. Park Geun-hye has called for establishing a trilateral strategic dialogue among Korea, the United States, and China that presumably could discuss various situations involving North Korea.76 Since China’s 2001 entry into the World Trade Organization, China has emerged as South Korea’s most important economic partner. Over 20% of South Korea’s total trade is with China, twice the level for South Korea-U.S. and South Korea-Japan trade.77 For years, China has been the number one location for South Korean firms’ foreign direct investment, and South Korea is negotiating a bilateral FTA with China. Yet, even as China is an important source of South Korean economic growth, it also looms large as an economic competitor. Indeed, fears of increased competition with Chinese enterprises have been an important motivator for South Korea’s push to negotiate a series of FTAs with other major trading partners around the globe. Park Geun-hye has placed a priority on improving South Korea’s relations with China, which generally are thought to have been cool during Lee Myung-bak’s tenure. In June 2013, Park traveled to China for what was generally regarded as a successful visit that included meetings with Chinese President Xi Jinping. Since then, the two sides have expanded a number of highlevel arrangements designed to boost strategic communication and dialogue. As President, Park has held five meetings with Chinese President Xi Jinping, including a summit in Seoul in July 2014. Notably, Xi’s first visit to the Korean Peninsula as President was to South Korea, not to China’s ally, North Korea. For China, the summit was an opportunity to reinforce mutual distrust of Japan, deepen bilateral trade ties, and put pressure on North Korea, whose nuclear weapons program and other provocations China sees as providing unwelcome justification for the U.S. military presence in Asia. For South Korea, trade was a key interest, but a more significant aspect may be the goal of aligning China’s strategic interests with South Korea rather than North Korea. Although Xi and Park have described bilateral ties as having reached an “unprecedented level of strategic understanding,” most analysts do not expect that South Korea will prioritize relations with China at the expense of the U.S. alliance. Many South Koreans point to fundamental differences between Seoul’s and Beijing’s interests in North Korea, and increasing rivalry between Chinese and South Korean firms in recent years has accentuated the economic competition between the two countries.78 76 Park Geun-hye, “Trustpolitik and the Making of a New Korea,” November 15, 2012. Much of South Korea’s exports to China are intermediate goods that ultimately are used in products exported to the United States and Europe. 78 Kim Jiyoon, Karl Friedhoff, Lee Euicheol, and Kang Chungku, “One Bed, Two Dreams: Assessing Xi Jinping’s Visit to Seoul,” Asan Institute Issue Brief, July 16, 2014, http://en.asaninst.org/one-bed-two-dreams-assessing-xijinpings-visit-to-seoul. 77 c11173008 Congressional Research Service 26 U.S.-South Korea Relations . Economic Relations South Korea and the United States are major economic partners. In 2014, two-way trade between the two countries totaled $114 billion (see Table 1), making South Korea the United States’ sixthlargest trading partner. For some western states and U.S. sectors, the South Korean market is even more important. South Korea is far more dependent economically on the United States than the United States is on South Korea. In 2014, the United States was South Korea’s second-largest trading partner, second-largest export market, and the third-largest source of imports. In 2013, it was among South Korea’s largest suppliers of foreign direct investment (FDI). As South Korea has emerged as a major industrialized economy, and as both countries have become more integrated with the world economy, economic interdependence has become more complex and attenuated. In particular, the United States’ economic importance to South Korea has declined relative to other major powers. In 2003, China for the first time displaced the United States from its perennial place as South Korea’s number one trading partner. Japan and the 28member European Union each also rival and have at times surpassed the United States as South Korea’s second-largest trading partner. South Korea’s export-driven economy and subsequent competition with domestic U.S. producers in certain products has also led to some trade frictions with the United States. For example, imports of certain South Korean products—mostly steel or stainless steel items as well as polyester, chemicals, and washing machines—have been the subject of U.S. antidumping and countervailing duty investigations. As of May 18, 2015, for instance, antidumping duties were being collected on 14 South Korean imports and countervailing duties were being assessed on 3 South Korean products.79 The George W. Bush and Roh Moo-hyun Administrations initiated the KORUS FTA negotiations in 2006 and signed an agreement in June 2007.80 In October 2011, the House and Senate passed H.R. 3080, the United States-Korea Free Trade Agreement Implementation Act, which was subsequently signed by President Obama.81 In March 2012, the U.S.-South Korea FTA entered into force. Upon the date of implementation of the KORUS FTA, 82% of U.S. tariff lines and 80% of South Korean tariff lines were tariff free in U.S.-South Korean trade, whereas prior to the KORUS FTA, 38% of U.S. tariff lines and 13% of South Korean tariff lines were duty free. By the 10th year of the agreement, the figures will rise to an estimated 99% and 98%, respectively, with tariff elimination occurring in stages and the most sensitive products having the longest phase-out periods. Non-tariff barriers in goods trade and barriers in services trade and foreign investment are to be reduced or eliminated under the KORUS FTA. At the time of this writing, the KORUS FTA had been in force for just over three years; therefore it is still early to ascertain its overall impact on U.S.-South Korean bilateral trade with some provisions of the agreement yet to take effect and tariffs on certain products continuing to phase out. Nevertheless, Table 1 below presents U.S.-South Korea merchandise trade data for selected 79 U.S. International Trade Commission (USITC), http://www.usitc.gov/trade_remedy/documents/orders.xls. For more on the KORUS FTA, see CRS Report RL34330, The U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implementation, coordinated by Brock R. Williams. 81 The House vote was 278-151. In the Senate, the vote was 83-15. 80 c11173008 Congressional Research Service 27 U.S.-South Korea Relations . years; total bilateral goods trade grew by nearly 10% in 2014 compared to 2013. U.S. exports to South Korea increased by 6.7% in value, while U.S. imports from South Korea increased by around 11.5%. The goods trade deficit increased by 21.3%. Table 1. Annual U.S.-South Korea Merchandise Trade, Selected Years (billions of U.S. dollars) Year U.S. Exports U.S. Imports Trade Balance Total Trade 1990 14.4 18.5 -4.1 32.9 1995 25.4 24.2 1.2 49.6 2000 27.9 40.3 -12.4 68.2 2005 27.5 43.8 -16.3 71.3 2010 38.8 48.9 -10.1 87.7 2011 43.4 56.7 -13.3 100.1 2012* 42.3 58.9 -16.6 101.2 2013 41.7 62.4 -20.7 104.1 2014 44.5 69.6 -25.1 114.2 Major U.S. Export Items Semiconductors and semiconductor manufacturing equipment; medical equipment; civilian aircraft; chemical products; motor vehicles and parts; plastics; corn and wheat; and beef and pork. Major U.S. Import Items Motor vehicles and parts; cell phones; computers, tablets, and their components; iron and steel and products; jet fuel and motor oil; plastics; and tires. Source: Global Trade Atlas, accessed February 12, 2015. Notes: Exports based on total exports and imports based on general imports. (*) The KORUS FTA went into effect on March 15, 2012. South Korea-U.S. Interaction over the Proposed TPP As mentioned earlier, South Korea in fall 2013 signaled its “interest” in joining the TPP negotiations, a move that the Obama Administration welcomed. The next formal step for South Korea to enter the TPP would be for the South Korean government to formally announce that it is seeking to participate. The timing of that announcement could alter what procedures follow. To date, joining the TPP negotiations has required reaching agreement with the existing negotiating parties over terms of entry, followed by a formal invitation to the negotiations from those members. Under U.S. trade promotion authority (TPA)—currently expired but still adhered to by the Administration—this invitation initiates U.S. domestic notification procedures, including notification to Congress of the Administration’s intent to enter FTA negotiations after a period of 90 days. If South Korea waits until after the TPP agreement is concluded to announce its intent to join, it would presumably follow the accession procedures that may be set forth in a final agreement. It is not yet clear what those procedures will be, but the accession process used for the World Trade Organization (WTO)—countries agree to the established rules of the agreement and then negotiate market access commitments (tariffs and quotas)—may serve as a template. As part of these procedures the United States may require some preliminary commitments from Seoul before it c11173008 Congressional Research Service 28 U.S.-South Korea Relations . agrees to South Korea’s participation in the negotiations. South Korea’s willingness and ability to resolve ongoing issues with the implementation of the KORUS FTA are among such measures.82 For example, some U.S. stakeholders are concerned that proposed auto emissions regulations based on average emissions across a company’s fleet may unfairly discriminate against U.S. exports, as U.S. auto makers are most competitive in sales of larger vehicles in the Korean market. Additional concerns have been raised over the Korean government’s implementation of KORUS FTA commitments on data flows and pharmaceutical intellectual property protection. Both governments are reportedly working to resolve these issues. U.S. officials reportedly also have been discussing with South Korea issues that would be included in the TPP but are not part of the KORUS FTA, such as state-owned enterprises and regulatory coherence, to see if South Korea would be prepared to make commitments in these areas. Ultimately, Congress must approve implementing legislation if a completed TPP agreement—with or without South Korea—is to apply to the United States. Additionally, during the TPP negotiating process, Congress has a formal and informal role in influencing U.S. negotiating positions, including through setting U.S. trade negotiating objectives and ongoing consultation mechanisms that have been part of TPA. TPA, which expired in 2007, is the authority that Congress gives to the President to negotiate trade agreements that would receive expedited legislative consideration.83 In the 113th Congress, legislation to renew TPA was introduced in the House (H.R. 3830) and Senate (S. 1900), but was never considered. High on the legislative agenda for some Members of Congress and the Administration, TPA legislation has been introduced in the 114th Congress (H.R. 1890/S. 995), passed by the Senate, and is expected to be considered in the House in June 2015. South Korea’s Economic Performance South Korea was hit hard by the global financial crisis that began in late 2008, because of its heavy reliance on international trade and its banks’ heavy borrowing from abroad. Real GDP growth declined to 0.7% in 2009. However, the South Korean economy roared back and grew by 6.5% in 2010. The government took strong countermeasures to blunt the crisis’s impact, engaging in a series of fiscal stimulus actions worth about 6% of the country’s 2008 GDP, by some measures the largest such package in the Organization for Economic Cooperation and Development (OECD) group of industrialized countries. The Bank of Korea (BOK) also acted aggressively, lowering interest rates from over 5% to 2%—at that time, a record low for South Korea—and engaging in a range of other operations, estimated by the OECD to be worth over 2.5% of GDP, designed to infuse liquidity in the Korean economy. The BOK negotiated currency swap agreements with the United States, Japan, and China.84 The South Korean won, after depreciating to around 1,500 won/dollar—a fall of nearly one-third from early 2008 to early 2009—gradually strengthened against the dollar, oscillating between the 1,000-1,200 won/dollar range since late 2010. The won’s depreciation in 2008 and 2009 helped to stimulate South Korea’s economic recovery by making its exports cheaper relative to many other currencies, particularly the Japanese yen. In contrast, since 2013, the yen has depreciated considerably, falling by a third against the dollar, coinciding with Prime Minister Abe Shinzo’s election in Japan and his focus on stimulating the Japanese economy with a combination of monetary, fiscal, and structural reform policies known as “Abenomics.” The yen’s fall has given a 82 The White House, “Remarks by President Obama at Business Roundtable,” press release, April 26, 2014. In his remarks, President Obama said, “I discussed this [KORUS implementation] with President Park last night. We both agreed that these are issues we can work through together. And given South Korea’s interest in the Trans-Pacific Partnership, fully implementing KORUS also is the single most important step that South Korea can take now to show that it’s prepared to eventually meet the high standards of TPP.” 83 For more on TPA, see CRS Report RL33743, Trade Promotion Authority (TPA) and the Role of Congress in Trade Policy, by Ian F. Fergusson. 84 The October 2008 swap agreement with the U.S. Federal Reserve gave Bank of Korea access to up to $30 billion in US dollar funds in exchange for won. c11173008 Congressional Research Service 29 U.S.-South Korea Relations . boost to Japanese exporters and proven politically unpopular with trade partners including the United States and South Korea. President Park criticized the yen’s fall at the November 2014 summit of G-20 leaders.85 Since 2010, South Korean real GDP growth has slowed, in part due to a slowdown in its foreign trade and the won’s appreciation. South Korea’s economy is highly dependent upon capital inflows and exports, the latter of which are equal to around half of the country’s annual GDP. Thus, South Korea remains vulnerable to a slowdown in its major export markets: China, the United States, the European Union, and Japan. GDP growth in 2011 was 3.7%, 2.3% in 2012, 2.9% in 2013, and 3.3% in 2014. To stimulate growth, the Park government in July 2014 announced a $40 billion stimulus package, equivalent to roughly 3% the size of the South Korean economy. In March 2015, the Bank of Korea cut South Korea’s base interest rate to a record-low 1.75%. Three months later, the Bank cut the rate again, to 1.5%, citing declining exports and the contractionary effects of the MERS outbreak on South Korea’s domestic consumption.86 Figure 3. South Korea’s Real GDP Growth, 2007-2014 Source: Bank of Korea, reprinted in the Economist Intelligence Unit. Although South Korea’s economic performance may look favorable to many around the world, complaints in South Korea have risen in recent years that only rich individuals and large conglomerates (called chaebol)—which dominate the economy—have benefitted from the country’s growth since the 2008-2009 slowdown. The 2012 presidential election was largely fought over the issues of governance (in the wake of a number of corruption scandals), social welfare, and rising income inequality. Leading figures in both parties, including President Park, have proposed ways to expand South Korea’s social safety net. As mentioned in the politics section below, lower-than-expected growth in 2013 and 2014 contributed to Park’s scaling back her plans. South Korea has one of the lowest rates of social welfare spending in the industrialized world, a problem exacerbated by the already high levels of indebtedness of the average South 85 86 c11173008 Kim Seon-gul, “Park Criticizes Weakening Yen,” mk Business News, November 18, 2014. The Bank of Korea, “Monetary Policy Decision,” June 11, 2015. Congressional Research Service 30 U.S.-South Korea Relations . Korean household. The rapid aging of the South Korean population is expected to create additional financial pressures on government expenditures in the future. Nuclear Energy and Non-Proliferation Cooperation Bilateral Nuclear Energy Cooperation The United States and South Korea have cooperated in the peaceful use of nuclear energy for over 50 years.87 This cooperation includes commercial projects as well as R&D work on safety, safeguards, advanced nuclear reactors, and fuel cycle technologies. As mentioned in the introductory section of this report, in March 2014, the two countries extended for two years their bilateral civilian nuclear cooperation agreement, often referred to as a “123 agreement” under section 123 of the Atomic Energy Act (AEA) as amended.88 An extension of the agreement until March 2016 was approved by Congress (S. 1901) in January 2014 and passed into law (P.L. 11381). Renewing the agreement is necessary because the existing agreement was concluded before the current requirements under Section 123a of the AEA were enacted, and the existing agreement does not meet all of the AEA’s requirements. The agreement is expected to be transmitted to Congress for review by fall 2015 in order to meet the required 90 days of congressional consideration. The renewal agreement text was initialed by the two countries in April 2015, and is expected to be signed in June 2015 to allow for the required review periods. U.S. interagency officials must review the agreement and prepare required nonproliferation and national security assessments before submitting it to Congress for the required review period. The agreement would likely meet all the terms of the Atomic Energy Act89 and not require any exemptions from the law’s requirements. Therefore, the agreement could enter into force after a 30-day consultation period and a review period of 60 days of continuous session90 unless Congress enacted a joint resolution of disapproval. Congress also has the option of adopting either a joint resolution of approval with (or without) conditions, or stand-alone legislation that could approve or disapprove the agreement. Any congressional efforts to block the agreement would be subject to presidential veto. One of the reasons Seoul and Washington decided on a two-year extension was to give more time to negotiators to work out a sticking point in the talks—how to treat fuel cycle issues. South Korea reportedly had requested that the new agreement include a provision that would give permission in advance for U.S.-obligated spent nuclear fuel to be reprocessed to make new fuel 87 The original agreement for civilian nuclear cooperation was concluded in 1956, and amendments were made in 1958, 1965, 1972, and 1974. See also CRS Report R41032, U.S. and South Korean Cooperation in the World Nuclear Energy Market: Major Policy Considerations, by Mark Holt. 88 See also CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth D. Nikitin. Full text of the agreement is available at http://nnsa.energy.gov/sites/default/files/nnsa/inlinefiles/ Korea_South_123.pdf. 89 Under section 123.a, codified at 42 U.S.C. 2153(a)), Atomic Energy Act of 1946, ch. 724, 60 Stat. 755 (1946), as amended. 90 Days on which either chamber is in a recess of more than three days (pursuant to a concurrent resolution authorizing the recess) do not count toward the total. If Congress adjourns its session sine die, continuity is broken, and the count starts anew when it reconvenes. c11173008 Congressional Research Service 31 U.S.-South Korea Relations . using a type of reprocessing called pyroprocessing.91 The United States and South Korea are jointly researching pyroprocessing, but the technology is at the research and development stage.92 The Obama Administration would prefer to conclude the U.S.-ROK joint study on this technology before making any decision to approve such activities. Reprocessing of U.S.-obligated spent fuel requires approval by the United States, typically on a case-by-case basis (referred to as “programmatic consent”). While details are not yet known, press reports indicate that the two sides have come to an agreement about the extent of research and development of the technology allowed in South Korea under the new accord. It is expected that the renewed agreement may contain some additional allowances for R&D in South Korea on pyroprocessing but would not allow for advanced work without further permission.93 It also provides for a new High Level Commission where the two sides would review cooperation under the agreement and possibly resolve fuel cycle issues in the future. For several decades, the United States has pursued a policy of limiting the spread of enrichment and reprocessing technology to new states as part of its nonproliferation policies.94 This is because enrichment and reprocessing can create new fuel or material for nuclear weapons. Advance permission to reprocess rarely has been included in U.S. nuclear cooperation agreements, and to date has only been granted to countries that already had the technology (such as to India, Japan, and Western Europe). However, the issue has become a sensitive one in the U.S.-ROK relationship. Many South Korean officials and politicians see the United States’ rules as limiting South Korea’s national sovereignty by requiring U.S. permission for civilian nuclear activities. This creates a dilemma for U.S. policy as the Obama Administration has been a strong advocate of limiting the spread of fuel cycle facilities to new states, and would prefer multilateral solutions to spent fuel disposal. Spent fuel disposal is a key policy issue for South Korean officials, and some see pyroprocessing as a potential solution. While South Korean reactor-site spent fuel pools are filling up, the construction of new spent fuel storage facilities is highly unpopular with the public. Some officials argue that in order to secure public approval for an interim storage site, the government needs to provide a long-term plan for the spent fuel. However, some experts point out that byproducts of spent fuel reprocessing would still require long-term storage and disposal options. Other proponents of pyroprocessing see it as a way to advance energy independence for South Korea. For decades, the United States and South Korea have worked on joint research and development projects to address spent fuel. In the 1990s, the two countries worked intensely on research and development on a different fuel recycling technology (the “DUPIC” process), but this technology 91 Daniel Horner, “South Korea, U.S. at Odds over Nuclear Pact,” Arms Control Today, September 2012, http://armscontrol.org/act/2012_09/Sout-Korea-US-at-Odds-Over-Nuclear-Pact. Under the 1978 Nuclear Nonproliferation Act, consent rights apply to material originating in the U.S. or material that has been fabricated into fuel or irradiated in a reactor with U.S. technology. The majority of South Korea’s spent fuel would need U.S. consent before it could be reprocessed. 92 Reprocessing of spent nuclear fuel can be used to make new reactor fuel or to separate out plutonium in the spent fuel for weapons use. Pyroprocessing, or electro-refining, is a non-aqueous method of recycling spent fuel into new fuel for fast reactors. It only partially separates plutonium and uranium from spent fuel. There is debate over the proliferation implications of this technology. 93 “New S. Korea-U.S. Nuke Deal to be ‘Win-Win’ for Both: Einhorn,” Yonhap News, March 19, 2015. 94 For more, see CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth D. Nikitin. c11173008 Congressional Research Service 32 U.S.-South Korea Relations . ultimately was not commercialized. In the past 10 years, joint research has centered on pyroprocessing. The Korean Atomic Energy Research Institute (KAERI) is conducting a laboratory-scale research program on reprocessing spent fuel with an advanced pyroprocessing technique. U.S.-South Korean bilateral research on pyroprocessing began in 2002 under the Department of Energy’s International Nuclear Energy Research Initiative (I-NERI). R&D work on pyroprocessing was temporarily halted by the United States in 2008, due to the proliferation sensitivity of the technology. In an attempt to find common ground and continue bilateral research, in October 2010 the United States and South Korea began a 10-year Joint Fuel Cycle Study on the economics, technical feasibility, and nonproliferation implications of spent fuel disposition, including pyroprocessing. In July 2013, a new agreement on R&D technology transfer for joint pyroprocessing work in the United States took effect as part of the Joint Fuel Cycle Study.95 While some in the Korean nuclear research community have argued for development of pyroprocessing technology, the level of consensus over the pyroprocessing option among Korean government agencies, private sector/electric utilities, and the public remains uncertain. Generally, there appears to be support in South Korea for research and development, but some analysts are concerned about the economic and technical viability of commercializing the technology. While the R&D phase would be paid for by the government, the private sector would bear the costs of commercialization. At a political level, pyroprocessing may have more popularity as a symbol of South Korean technical advancement and the possibility of energy independence. However, other public voices are concerned about safety issues related to nuclear energy as a whole. Others see fuel cycle capabilities as part of a long-term nuclear reactor export strategy, envisioning that South Korea could have the independent ability to provide fuel and take back waste from new nuclear power countries in order to increase its competitive edge when seeking power plant export contracts. Some analysts critical of the development of pyroprocessing in South Korea point to the 1992 Joint Declaration, in which North and South Korea agreed they would not “possess nuclear reprocessing and uranium enrichment facilities” and are concerned about the impact of South Korea’s pyroprocessing on negotiations with the North. Others emphasize that granting permission for pyroprocessing in South Korea would contradict U.S. nonproliferation policy to halt the spread of sensitive technologies to new states. Some observers, particularly in South Korea, point out that the United States has given India and Japan consent to reprocess, and argue that they should be allowed to develop this technology under safeguards. Since the technology has not been commercialized anywhere in the world, the United States and the International Atomic Energy Agency (IAEA) are working with the South Korean government to develop appropriate IAEA safeguards should the technology be developed further. Whether pyroprocessing technology can be sufficiently monitored to detect diversion to a weapons program is a key aspect of the Joint Study. South Korean Nonproliferation Policy South Korea has been a consistent and vocal supporter of strengthening the global nonproliferation regime, which is a set of treaties, voluntary export control arrangements, and other policy coordination mechanisms that work to prevent the spread of nuclear, biological, and 95 c11173008 Federal Register, Vol. 708, No. 105, May 31, 2013. Congressional Research Service 33 U.S.-South Korea Relations . chemical weapons and their delivery systems. South Korea destroyed all of its chemical weapons stocks by 2008, under the Chemical Weapons Convention.96 South Korea is a member of the Nuclear Suppliers’ Group (NSG), which controls sensitive nuclear technology trade, and adheres to all international nonproliferation treaties and export control regimes. South Korea also participates in the G-8 Global Partnership, and other U.S.-led initiatives—the Proliferation Security Initiative, the International Framework for Nuclear Energy Cooperation (formerly GNEP), and the Global Initiative to Combat Nuclear Terrorism. South Korea has contributed funds to the United States’ nuclear smuggling prevention effort, run by the Department of Energy, and contributed to the Organization for the Prohibition of Chemical Weapons (OPCW) Trust Fund to support the destruction of Syrian chemical weapons. South Korea is a member of the Non-Proliferation Treaty (NPT) which requires countries to conclude a safeguards agreement with the International Atomic Energy Agency (IAEA). An Additional Protocol (AP) to South Korea’s safeguards agreement entered into force as of February 2004. The AP gives the IAEA increased monitoring authority over the peaceful use of nuclear technology. In the process of preparing a more complete declaration of nuclear activities in the country, the Korean Atomic Energy Research Institute (KAERI) disclosed previously undeclared experiments in its research laboratories on uranium enrichment in 2000, and on plutonium extraction in 1982. The IAEA Director General reported on these undeclared activities to the Board of Governors in September 2004, but the Board did not report them to the U.N. Security Council. In response, the Korean government reconfirmed its cooperation with the IAEA and commitment to the peaceful use of nuclear energy, and reorganized the oversight of activities at KAERI. The experiments reminded the international community of South Korea’s plans for a plutonium-based nuclear weapons program in the early 1970s under President Park Chung-hee, the father of the current President Park. At that time, deals to acquire reprocessing and other facilities were canceled under intense U.S. pressure, and Park Chung-hee eventually abandoned weapons plans in exchange for U.S. security assurances. The original motivations for obtaining fuel cycle facilities as well as the undeclared experiments continue to cast a shadow over South Korea’s long-held pursuit of the full fuel cycle. As a result, since 2004, South Korea has aimed to improve transparency of its nuclear programs and participate fully in the global nonproliferation regime. In addition, the 1992 Joint Declaration between North and South Korea says that the countries “shall not possess nuclear reprocessing and uranium enrichment facilities.” Since North Korea has openly pursued both of these technologies, an intense debate is underway over whether South Korea should still be bound by those commitments. Some analysts are concerned that a denuclearization agreement with North Korea could be jeopardized if South Korea does not uphold the 1992 agreement. South Korea hosted the 2012 Nuclear Security Summit, a forum initiated by President Obama shortly after his inauguration. The South Korean government agreed to host the summit because it fit into the “Global Korea” concept of international leadership and summitry; it was a chance for the South Korean nuclear industry to showcase its accomplishments; and the South Korean government was able to emphasize South Korea’s role as a responsible actor in the nuclear field, in stark contrast with North Korea. It was also seen as an important symbol of trust between the U.S. and South Korean Presidents. 96 South Korea has not recognized this stockpile publicly, and chose to destroy the weapons under the CWC confidentiality provisions. “South Korea Profile,” Nuclear Threat Initiative, http://www.nti.org/country-profiles/southkorea/ c11173008 Congressional Research Service 34 U.S.-South Korea Relations . South Korean Politics South Korean politics continue to be dominated by Park Geun-hye (born in 1952) and her conservative Saenuri (“New Frontier”) Party (NFP), which controls the legislature. Ms. Park was elected in December 2012, becoming not only South Korea’s first woman president, but also the first presidential candidate to receive more than half of the vote (she captured 51.6%) since South Korea ended nearly three decades of authoritarian rule in 1988. She is to serve until February 2018. By law, South Korean presidents serve a single five-year term. Park is the daughter of the late Park Chung-hee, who ruled South Korea from the time he seized power in a 1961 military coup until his assassination in 1979. According to the Asan Institute’s daily polling service, Park’s public approval ratings were in the 60%-70% range for much of 2013, in part due to positive assessments of her handling of foreign affairs, particularly inter-Korean relations. However, her poll numbers declined to the 50% range by the end of the year, due to a number of factors, including a perception that her government had done little to follow through on her campaign pledges to overcome South Korea’s economic difficulties and strengthen its social safety net; the mounting evidence that the country’s intelligence service had tried to influence the 2012 presidential election in her favor (though no evidence has surfaced that Park knew of the matter); and her government’s handling of a railway strike. In particular, Park’s favorability ratings have fallen among voters under 40, a development that many expected; in the 2012 election under-40 voters chose Park’s opponent, the Democratic United Party’s Moon Jae-In, by a wide margin. Likewise, those over 50 overwhelmingly voted for Park and continue to be her strongest base of support. Figure 4. Party Strength in South Korea’s National Assembly As of May 2015 Source: South Korean National Assembly. Notes: President Park Geun-hye is from the Saenuri (New Frontier) Party. The last nationwide legislative elections for all 300 National Assembly seats were held in April 2012. The next nationwide legislative elections are scheduled for April 2016. South Korea’s next presidential election is scheduled for December 2017. By law, South Korean presidents are limited to one five-year term. c11173008 Congressional Research Service 35 U.S.-South Korea Relations . A Powerful Executive Branch Nominally, power in South Korea is shared by the president and the 300-member unicameral National Assembly. Of these, 246 members represent single-member constituencies. The remaining 54 are selected on the basis of proportional voting. National Assembly members are elected to four-year terms. The president and the central bureaucracy continue to be the dominant forces in South Korean policymaking, as formal and informal limitations prevent the National Assembly from initiating major pieces of legislation. Political Parties Presently, there are two major political parties in South Korea: President Park’s conservative Saenuri Party (which has been translated as “New Frontier Party” or NFP) and the opposition, center-left New Politics Alliance for Democracy (NPAD).97 The NFP has controlled the Blue House (the residence and office of South Korea’s president) and the National Assembly since 2008. (See Figure 4.) U.S. ties have historically been much stronger with South Korea’s conservative parties. South Korea’s progressive political parties—now largely consolidated in the NPAD—controlled the Blue House for 10 years, from 1998 to 2008. For a four-year period, from 2004 to 2008, a progressive party was the largest political group in in the National Assembly and held a majority for part of that period. After failing to retake the Blue House or National Assembly in 2012 elections, the progressive camp faced several more years without significant tools of power and influence within the South Korean polity. In the past, the NPAD’s predecessor parties have advocated positions that, if adopted, could pose challenges for the Obama Administration’s Korea policy, including calling for the renegotiation of some provisions of the KORUS FTA, and adopting a more conciliatory approach to North Korea. A Short History of South Korean Presidential Changes For most of the first four decades after the country was founded in 1948, South Korea was ruled by authoritarian governments. The most important of these was led by President Park’s father, Park Chung-hee, a general who seized power in a military coup in 1961 and ruled until he was murdered by his intelligence chief in 1979. The elder Park’s legacy is a controversial one. On the one hand, he orchestrated the industrialization of South Korea that transformed the country from one of the world’s poorest. On the other hand, he ruled with an iron hand and brutally dealt with real and perceived opponents, be they opposition politicians, labor activists, or civil society leaders. For instance, in the early 1970s South Korean government agents twice tried to kill then-opposition leader Kim Dae-jung, who in the second attempt was saved only by U.S. intervention. The divisions that opened under Park continue to be felt today. Conservative South Koreans tend to emphasize his economic achievements, while progressives focus on his human rights abuses. Ever since the mid-1980s, when widespread anti-government protests forced the country’s military rulers to enact sweeping democratic reforms, democratic institutions and traditions have deepened in South Korea. In 1997, longtime dissident Kim Dae-jung was elected to the presidency, the first time an opposition party had prevailed in a South Korean presidential election. In December 2002, Kim was succeeded by a member of his left-of-center party: Roh Moo-hyun, a self-educated former human rights lawyer who emerged from relative obscurity to defeat establishment candidates in both the primary and general elections. Roh campaigned on a platform of reform—reform of Korean politics, economic policymaking, and U.S.-ROK relations. He was elected in part because of his embrace of massive anti-American protests that ensued after a U.S. military vehicle killed two Korean schoolgirls in 2002. Like Kim Daejung, Roh pursued a “sunshine policy” of largely unconditional engagement with North Korea that clashed with the 97 The Saenuri Party formerly was known as the Grand National Party (GNP). The New Politics Alliance for Democracy formerly was known as the Democratic Party. c11173008 Congressional Research Service 36 U.S.-South Korea Relations . harder policy line pursued by the Bush Administration until late 2006. Roh also alarmed U.S. policy makers by speaking of a desire that South Korea should play a “balancing” role among China, the United States, and Japan in Northeast Asia. Despite this, under Roh’s tenure, South Korea deployed over 3,000 non-combat troops to Iraq—the third-largest contingent in the international coalition—and the two sides initiated and signed the KORUS FTA. In the December 2007 election, former Seoul mayor Lee Myung-bak’s victory restored conservatives to the presidency. Among other items, Lee was known for ushering in an unprecedented level of cooperation with the United States over North Korea and for steering South Korea through the worst of the 2008-2009 global financial crisis. Under the slogan “Global Korea,” he also pursued a policy of expanding South Korea’s participation in and leadership of various global issues. During the final two years of his presidency, however, Lee’s public approval ratings fell to the 25%-35% level, driven down by—among other factors—a series of scandals surrounding some of his associates and family members, and by an increasing concern among more Koreans about widening income disparities between the wealthy and the rest of society. Author Contact Information Mark E. Manyin, Coordinator Specialist in Asian Affairs mmanyin@crs.loc.gov, 7-7653 Ian E. Rinehart Analyst in Asian Affairs irinehart@crs.loc.gov, 7-0345 Emma Chanlett-Avery Specialist in Asian Affairs echanlettavery@crs.loc.gov, 7-7748 Brock R. Williams Analyst in International Trade and Finance bwilliams@crs.loc.gov, 7-1157 Mary Beth D. Nikitin Specialist in Nonproliferation mnikitin@crs.loc.gov, 7-7745 c11173008 Congressional Research Service 37